Apple HQ: Most Valuable Building America
The Apple’s iconic, and very expensive headquarters in Cupertino, California, has been considered by many to be one of the most structurally innovative buildings in America. It now has another honor: one of the most expensive buildings in the U.S.
The Santa Clara County Assessor office recently assessed Apple Park at $3.6 billion for the 2.8 million square foot facility. Just for comparison purposes, One World Trade Center in New York cost $3.9 billion; the SalesForce HQ located at TransBay Tower in San Francisco was assessed at $1.7 billion. The previous record-holder for the priciest real estate was the sale of the General Motors building in New York to the Blackstone Group in 2008 for $2.9 billion.
What makes Apple’s HQ unique is that it is all in one building. This makes it easier to compare values than with some of Apple’s tech cohorts, which tend to utilize multi-building campus arrangements. It’s more difficult to value these properties, since each building can be valued separately.
Apple’s HQ reportedly cost $5 billion to build, but it really speaks to the innovation and uniqueness of the Apple brand. The sleek and modern aesthetic is balanced by sustainable building practices, energy efficiency, and eco-friendly design. The building opened in 2017.
Apple, like many other companies in CA with large footprints, has disputed its assessed valuations, in order to limit property tax costs. And really, how do you figure out a value, if you have literally nothing to compare it to?
The Impact of Tech on Silicon Valley
The economic impacts of tech employers have touched nearly every level of life in the Bay area, and the tax roles prove it. In 2018, the tax assessments for Santa Clara County alone were $516 billion, according to the county assessor, much of which belonged to the Silicon Valley tech giants.
Santa Clara has experienced a lengthy period of growth, but the signs of slower growth are starting to show.
“There are early indicators that the economy may be in transition if for no other reason that we are due for a recession,” Stone said in a recent statement to CoStar. “We are seeing a marked increase in for-rent or -lease signs outside of major apartment complexes, in addition to concessions such as free rent and reduced deposits to attract tenants, a clear signal that the peak of the apartment market has passed.”
The commercial market hasn’t escaped a mild slow-down. “The unsustainable and frenzied leasing activity of 2015 and 2016 has slowed, in part, as a result of the significant increase in the supply of new office space,” Stone said. As growth slows, so too may the tax assessments on properties.
According to CoStar data, office vacancies are still extremely low, hovering around 2.5%.
Keystone Commercial Brokerage serves the needs of commercial real estate investors in the Santa Clara and San Mateo counties, specializing in commercial property, multi-unit residential, office space, and multi-use property. Paul Phangureh has over 16 years of experience in buying and selling in the Santa Clara and San Mateo County areas. Contact Paul at 650-924-2544, or email at [email protected]