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LinkedIn, the employment and networking social media juggernaut, has just closed a $74 million deal to purchase a 120,000-square-foot property in Sunnyvale, California, CoStar reports. This represents a vote of confidence for Silicon Valley’s office real estate, which has yet to fully recover from the pandemic-induced remote working phenomenon.
The property, located at 1022 W. Maude Ave, was previously owned by another tech company, Synopsys (NASDAQ:SNPS), which purchased it almost seven years ago but needed to sell it to adapt to a leaner post-pandemic holding strategy.
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“We actively manage our real estate footprint based on market conditions and other factors,” a Synopsys spokesperson told CoStar. Those factors included “pruning underutilized assets to drive value, which is the case here,” Synopsis said.
LinkedIn was also forced to prune its assets post-pandemic. In late 2021, it paid almost $123 million for two office and research properties at 810-820 and 870 Maude Ave., close to its Silicon Valley corporate hub, CoStar reports. The company also finalized a lease for a 195,000-square-foot office building at 684 Maude Ave., the first building at the development, which broke ground in mid-2019.
Eighteen months later, however, as the commercial real estate downturn took hold, it sold a property at 880-888 W. Maude Ave. for $23 million and attempted to sublease over 63,500 square feet of its corporate hub in downtown San Francisco amid waves of layoffs.
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The company’s newest acquisition comes at a time when other large-scale tech companies, such as Meta (NASDAQ:META) and Google, are still making employment cuts. Leasing activity has also dropped in Silicon Valley, resulting in a record-high vacancy rate of about 15.5%, according to CoStar data.
That said, tech companies were still responsible for 30% of the 100 biggest office deals last year, according to commercial real estate brokerage CBRE. In its November report, CBRE stated that tech firms leased 9.9 million square feet of office space during the third quarter, up from 8 million in the second quarter, the highest amount since the fourth quarter of 2021.