HQ Expansion to Include a Night Purge of Warm Air in Hot Market

The Fortinet headquarters will be a roughly 172,000-square-foot building with a LEED Gold rating.

SUNNYVALE, CA—Unlike the dotcom era expansion, the current economic expansion is backed by profitable tech companies that are producing hardware, software and social media products commanding formidable consumer demand, according to Colliers International’s second quarter office report. Given these strong market fundamentals, demand for quality commercial property in the Valley is at unprecedented levels. Despite echoes of the Bay Area exodus and soaring cost of commercial property, Colliers’ data shows that Silicon Valley’s property market remains red hot.

Amid the sizzling demand, tech companies continue to expand here. For example, Fortinet recently broke ground on an expansion of its corporate headquarters building. This new facility, located at the corner of Kifer Road and Commercial St., will be a roughly 172,000-square-foot structure with a LEED Gold energy efficiency rating.

“As one of the top cybersecurity companies in the world, Fortinet contributes to jobs and growth in Sunnyvale and the surrounding community,” Larry Klein, Sunnyvale mayor. “The city of Sunnyvale is happy to support Fortinet’s growth and development with the expansion of its headquarters.”

Fortinet is a provider of network security appliances for carriers, data centers, enterprises and distributed offices. Fortinet has more than 6,000 global employees dedicated to the company’s mission to deliver high-performing security to secure and simplify IT infrastructures.

“Fortinet is tremendously proud to have called Sunnyvale home for almost 20 years,” says Ken Xie, founder, chairman of the board and CEO. “When we started Fortinet, we set out to build the most innovative, highest performing network security company in the industry. Today we are among the top three cybersecurity companies in the world.”

Last month’s groundbreaking is a new milestone for the company and its employees to continue that mission. The new building is set to include advanced technologies, such as a precast concrete structural system with a highly efficient passive cooling system. It also will have a “night purge” that flushes the warm air from the building, providing direct energy savings and significantly reducing the building’s overall carbon footprint.

Fortinet has engaged Sares Regis Group of Northern California’s commercial real estate team to serve as the development manager. Other key team members on the project include Heller Manus Architects and DPR Construction, which served as the general contractor.

“Fortinet’s vision for its new Sunnyvale headquarters will create a great place to work and contribute to the neighborhood,” Jeff Birdwell, president of Sares Regis Group of Northern California’s commercial division, tells GlobeSt.com. “As this project has a tight delivery timeline, we’ve shortened our construction time by implementing a precast concrete structural system manufactured off site. It is an honor to be chosen to help bring their new headquarters to fruition and allow them to occupy the space significantly earlier than if conventional construction methods were used.”

Silicon Valley’s commercial real estate market, fueled by that aforementioned tech expansion, remains incredibly vigorous. According to California’s Employment Development Department, the unemployment rate in Santa Clara County dropped slightly quarter-over-quarter to 2.2%, and remains below the national average of 3.5%. EDD figures also indicate the number of tech jobs is currently at an all-time high in the Bay Area, surpassing the dot-com era in 2000 by 16.3%. While the Silicon Valley’s share of tech jobs has marginally decreased relative to other Bay Area markets, Silicon Valley still holds the lion’s share of tech employment with 45.6% compared to the San Francisco-San Mateo market, which contains 34.8%.

At the end of second quarter 2019, Colliers International research is tracking more than 14.5 million square feet of active office and R&D space requirements in Silicon Valley greater than 20,000 square feet.