SUNNYVALE — Walmart’s digital unit has struck a deal to sublease a huge tech campus in Sunnyvale in an agreement that could potentially provide a big boost to a wobbly Silicon Valley office market.
Potentially thousands of Walmart.com employees could work in the modern campus.
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 is located near the corner of Crossman Avenue and Caribbean Drive in northern Sunnyvale. The property also fronts on East Java Drive.
An estimated 3,600 people could work there, given the square footage and type of office buildings.
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 virus, isolated people and workers hungered in a big way for tech products and services so they could work or socialize remotely.
Eventually, however, the easing of work-from-home mandates caused demand to fade for such technology products and services.
The diminished demand, in turn, prodded tech companies to chop jobs worldwide, including in the Bay Area — staffing reductions that also drastically curtailed tech companies’ need 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 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.
Brokers with commercial real estate firms Colliers and JLL arranged the sublease deal, according to the sources.
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 the downtown district.
