Santana West developers Federal Realty shift leasing strategy - Silicon Valley Business Journal

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'Obviously, you know what's going on with tech in Silicon Valley,' said Federal Realty CEO Donald Wood.

Feb 10, 2023, 4:53pm PST

The shift comes in response to what's happening in the market, Donald Wood, CEO of Federal Realty Investment Trust, which is developing Santana West and created the popular Santana Row mixed-use center across the street, said during the company's"We worked hard to get a full-building user at Santana West," Wood said."We shifted that strategy, and the business reason for that, is that we see more demand from that 50,000- to 100,000-square-foot user.

From One Santana West's groundbreaking, Federal Realty was intent to find a single tenant — presumably a technology company — to occupy the entire space. That, of course, was before the Covid-19 pandemic, which led to companies far and wide to embrace of at least part-time remote work by their employees and changed the way they viewed their space needs. It was also before tech companies including Google LLC, Meta Platforms Inc. and Intel Corp. announced mass layoffs.

Federal Realty officials declined to discuss how much its asking in rent at One Santana West. But in the fourth quarter, leasing rates in that part of San Jose were averaging around $5.79 a square foot — the highest of any district in the city, accordingIn the final three months of the year, the average vacancy rate in West San Jose, the area that includes One Santana West, was 16.3%, according to Cushman's report.

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Santana West developers Federal Realty shift leasing strategy - Silicon Valley Business JournalFederal Realty has given up looking for a single tenant to take all 375,000 square feet of office space at One Santana West.
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