REAL ESTATE NEWS

NIO USA MOVES HEADQUARTERS TO SAN JOSE

Published on Friday, January 14, 2022

The electric vehicle manufacturing firm has signed a 201,500-square-foot lease with a 10-year term.

 

Electric vehicle manufacturing firm NIO USA has signed a 201,500-square-foot lease with Zanker Road Partners, an affiliate of Oakmont Corporation, at 3151 Zanker Road in North San Jose. The office will serve as the firms headquarters office and itís research and innovation center, which includes research and digital development, testing, assembly, warehousing and operations. NIO signed a 10-year lease term at the office.

Following the pandemic, San Jose has attracted healthy office demand from technology companies, like NIO. In May, a report from Marcus & Millichap predicted that stability in tech sector jobs will pave the way for new hiring in secondary positions, ultimately supporting recovery in the marketís office sector with the creation of 41,900 new jobs created this year in the San Jose market, with payrolls increasing by 3.9%. Several companies are playing a role in the job growth. During the pandemic, tech companies retained a large share of their staff, and office-using companies were able to maintain staff levels within 1% of pre-recession numbers at the end of the first quarter this year.

Last year, global cloud-led, data-centric software company NetApp Inc. was among the major tech companies to sign a lease deal in the market. In April, the firm secured a long-term 301,019-square-foot lease within Federal Realty Investment Trustís mixed-use complex, Santana Row in San Jose, CA. The company has additionally sold its 21.5-acre, 702,193-square-foot, Sunnyvale Campus to New York-based, Tishman Speyer.

Investors have followed the demand. KKRís fund KKR Real Estate Select Trust acquired HQ @ First, a 603,000-square-foot office campus in Silicon Valley, from Japanese developer MORI TRUST CO for an undisclosed price. The property is currently fully leased to an investment-grade tenant. And, Briggs Development acquired a development site to build a COVID-safe office project. The San Jose property will include street entry, operable windows throughout and covered outdoor seating areas. The design focuses on an indoor-outdoor model that helps to protect against viral transmission.

As a result, San Jose topped the list of secondary markets for CRE investment, according to research from Trepp. The region, which includes Sunnyvale and Santa Clara, ranked first in Treppís recent roundup of real estate, outpacing the Las Vegas-Henderson-Paradise and Sacramento-Roseville-Arden, regions.

Zanker Road Partners renovated 3151 Zanker Road in 2020. The capital improvements include a new lobby and exterior, the rear cafť space and the addition of an outdoor deck and second-floor exterior balconies. The building is a good fit for both office and R&D use.

Colliers brokers Michael Rosendin, Craig Fordyce, Shane Minnis and Ryan Ward represented the landlord, while Sean Toomey, Jere Hench, John McMahon and Sean McMahon represented NIO.