SUNNYVALE — Walmart’s digital unit has struck a deal to sublease a huge tech campus in Sunnyvale in a deal that could potentially provide a big-time boost to a wobbly Silicon Valley office market.
The Sunnyvale office sublease by Walmart.com was confirmed by several commercial property sources, including some with direct knowledge of the transaction, who asked not to be named because they were not authorized to officially discuss the deal.
Walmart.com agreed to sublease all of a tech campus known as Moffett Green, a four-building office complex that totals 719,000 square feet, according to real estate sources familiar with the rental deal.
The office complex that Walmart.com is subleasing is located near the corner of Crossman Avenue and Caribbean Drive in northern Sunnyvale. The property also fronts on East Java Drive.
In 2021, Facebook app owner Meta Platforms leased the entire campus. At the time, the huge rental deal represented a major expansion for the tech titan. Not long after that mega leasing deal, Meta drastically shifted its real estate priorities.
During the worst of the coronavirus outbreak and business shutdowns to combat the spread of the deadly bug, isolated individuals and workers hungered in a big way for tech products and services so they could work or socialize remotely or from home.
Eventually, however, the easing of work-from-home mandates caused demand to fade for technology products and services.
The diminished demand, in turn, prodded tech companies to chop jobs worldwide as well as in the Bay Area — staffing reductions that also drastically curtailed the need by tech companies for office space. Vacancies rocketed higher as tech company office footprints shrank.
Meta Platforms has slashed 5,195 Bay Area jobs, affecting workers in Menlo Park, San Francisco, Fremont, Sunnyvale and Burlingame, official state labor agency filings show. One round of Meta cutbacks occurred in 2022 and another took place this year.
CommonWealth Partners is the current owner of the tech campus that Walmart.com is subleasing. In June 2022, CommonWealth Partners paid $707 million to buy the office complex from real estate stalwart Tishman Speyer.
That price represented a huge increase in value for the tech campus, which Tishman Speyer bought in 2021 from tech company NetApp for $365 million at a time when the property was empty.
NetApp had decided to vacate the Sunnyvale campus as part of the tech company’s shift of its headquarters to the Santana Row mixed-use village in San Jose.
The sublease deal would appear to represent an expansion for Walmart.com in Sunnyvale. The Registry real estate news site had previously reported the sublease deal.
Walmart.com has maintained a presence in Sunnyvale since at least 2014 when the company leased 107,000 square feet in an office building on the edges of that city’s downtown district.