Out: Surburban sprawl. In: Sidewalk cafes and metered parking.

At least, that’s the case for some technology firms in the San Jose, Calif., area. With outlying surburbs now saturated with start-ups, companies are increasingly choosing to relocate to San Jose’s in-the-midst-of-redevelopment downtown.

Leading the trend is AboveNet Communications, which two months ago opened its 123,500-sf data center in the downtown area’s former Pavilion retail center. And four new buildings in the area got the go-ahead in June, one a 22-story office tower to be built by developer Kimball Small near AboveNet’s block-long facility at First and San Fernando streets.

AboveNet is leasing 60% of that 329,000-sf tower, and already has 385 employees in the downtown area. Other tenants eyeing the rest of the space include Ask.com, America Online, and Webvan.

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