One Santana West office building in San Jose, located at 3155 Olsen Drive. Also visible: a portion of Santana Row (left), a historic domed movie theater (upper center) and the Winchester Mystery House (upper left) (Google Maps)
SAN JOSE — A new San Jose office building at Santana Row is starting to attract plenty of interest from prospective tenants now that its owner has revamped the property’s leasing approach, executives told analysts.
Federal Realty Investment Trust, the principal owner and developer of Santana Row, told Wall Street analysts during a conference call this week that a new strategy for the One Santana West office building is showing early signs of success.
One Santana West, an office building that totals 375,000 square feet, is the newest major addition to Santana Row, an iconic destination mixed-use complex of shops, restaurants, homes, office buildings and hotel facilities in west San Jose.
The old strategy: find a single big tenant that would lease the entire One Santana West office building.
The new strategy: One Santana West is now being marketed to tenants that might seek single floors in the office building.
“Our floor-by-floor buildout at Santana West seems to be attracting more interest in the marketplace,” Donald Wood, chief executive officer of Federal Realty, told analysts during the conference call.
Initially, the One Santana West building was being marketed as a site for a single tenant, most likely a major tech player. Commercial real estate experts note that Apple’s Cupertino home base is just a few miles to the west.
Plus, Federal Realty had already encountered success with the one-tenant, one-building approach with its leasing deals that brought to Santana Row tech companies Splunk and NetApp, which each are leasing entire big office buildings across the street from One Santana West.
However, big tech companies have launched waves of layoffs and curbed their appetite to gobble up huge chunks of office space, instead taking a measured approach to how quickly they will expand in the near future.
Plus, even before the recent spate of tech industry layoffs and space contractions, it wasn’t clear how quickly companies were returning to the office in the wake of coronavirus-linked business shutdowns and the trend to work from home.
Federal Realty’s pivot to offering bite-sized spaces in One Santana West has helped to drum up interest on the part of prospective tenants.
“Inquiries and market tours have seen renewed life in the last 30 to 60 days,” Wood said during the conference call.
Originally published at George Avalos