8x8 Puts Silicon Valley Headquarters on Sublease Market

CAMPBELL, CA–8×8, the cloud communications company, has put its 178,000-square-foot Silicon Valley headquarters on the sublease market.

The tech company is seeking one or more subtenants for the space it currently occupies as the single tenant of the five-story building at 675 Creekside Way in the San Jose suburb of Campbell.

The building is owned by NY-based JOSS Realty and Australian private equity firm Qualitas, which acquired it in March 2020 — a year after it opened — for $139 million. JLL is marketing the sublease.

According to marketing materials for the sublease offer, the building is available through Dec. 31, 2030—which is when 8×8’s lease expires—and divisible by floors, with asking rents negotiable.

The sublease offer for 675 Creekside is the second listing for a substantial office space in the San Jose market in the past two months. In August, Netflix listed a 165,000-square-foot office campus in nearby Los Gatos.

The streaming company is seeking one or more subtenants for The Sobrato Organization’s two-building office and research complex at 100 and 150 Winchester Circle. The space is available for sublease through Nov. 30, 2027, the balance remaining on the Netflix lease.

In a recent earnings statement, Netflix — which has a 450,000-square-foot headquarters in Los Gatos — reported an $80 million write-down in connection with its exit strategy for some of its leases, which indicates that its footprint downsizing is still in progress.

CRE investors will be keeping their eyes peeled to see if the uptick in subleasing activity by tech companies vacating their footprints represents a contagion of the trend that has afflicted the San Francisco office market since the beginning of the year.

According to Cushman & Wakefield, the Silicon Valley market had a 3.7 million-square-foot inventory of sublease space at the end of the second quarter, about three-quarters of the size of the sublease footprint in San Francisco. The 3.7 million in available sublease space represents a 32% increase compared with Q1 2021, C&W reported.

Office occupancy levels in San Francisco are still languishing below 40%, according to Kastle System’s latest weekly back-to-work barometer, a survey of office entry-card swipes in 10 US cities, with several major tech players announcing reductions in their footprints as they embrace hybrid work.

The list of downsizing tech firms in San Francisco includes one of the city’s largest employers: Salesforce.

The tech giant, headquartered in San Francisco — where it occupies two office towers with its name on them — announced in July is listing for subleasing about 412,000 square feet of the 817,000-square-foot, 43-story Salesforce West tower on Fremont St., GlobeSt. reported.

Salesforce will maintain ownership of the building and may reoccupy the space in the future, a Salesforce spokesperson said in a statement. About 352,000 square feet of the sublease listing will be available August 1, with the rest being vacated in December.