Lane Partners Plans 515K SF Industrial Campus in Sunnyvale

Lane Partners has filed plans with city officials to demolish six empty buildings—formerly a research campus for Fujitsu—on 26 acres it owns in Sunnyvale—and redevelop the site as a 515K industrial complex.

Fujitsu was phasing out the 313K SF campus it had occupied for more than 40 years when Lane acquired the property in October 2020 for $104M. The computer equipment company was in the process of moving into a building next door with less than half the space when the deal closed.

The architect HPA, said the campus, built to Fujitsu’s specifications in the early 1980s, could not accommodate multiple tenants and therefore is “no longer economically viable given 21st-century market requirements,” according to the application filed with Sunnyvale.

Lane is planning to develop three single-story buildings ranging from 162K SF to 178K SF. The buildings will have a tilt-up industrial configuration, they will be able to support manufacturing, R&D, commercial storage and logistics warehouse uses, the application stated.

A LEED Gold certificate from the US Green Building Council and all-electric power sources are required to meet Sunnyvale’s development standards for manufacturing and R&D office uses.

According to a recent report from JLL, demand for industrial space in Silicon Valley—now estimated by the brokerage at 8M SF—is more than double the available inventory, which is about 3M SF. JLL said the Silicon Valley industrial market is outperforming other Northern California markets, with no pause in demand.

“In fact, Silicon Valley is the only market in Northern California that has not experienced a lull in demand. Thus, the lack of transaction activity is not a reflection of interest, but due to a scarcity of product,” JLL’s Q2 Industrial Insight report for Silicon Valley stated.

“With land becoming scarcer, developers are turning to developments and conversions to bring more product into the pipeline. Redevelopment and conversions are expected to make up 60% of new development in 2023 and over 70% in 2024 and beyond,” the report said.

According to JLL, the 5.1M SF in the industrial pipeline in Silicon Valley nearly matches the amount of excess demand for space in the market, but many of the projects in the pipeline won’t break ground for another year or two.

The tightness in the Silicon Valley industrial market is pushing some manufacturers to seek space in East Bay, JLL said.