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Silicon Valley’s New Transport Initiatives Spur Confidence in Their Office Market

Google, Meta (formerly Facebook), and Apple are enlarging their Silicon Valley facilities according to city officials and real estate brokers familiar with the area. But they’re not the only ones. Three developers are now working on office developments in San Jose, California, despite the fact that next to no leases have been signed in advance. So what exactly is causing this? Many companies have, albeit begrudgingly, accepted that workers will continue to work remotely in some form or another, and developers in other major cities are waiting with bated breath to see how hybrid work trends will affect office markets in the long run. Why are Silicon Valley’s developers the only ones announcing major office developments? It’s because cities in Silicon Valley are finally investing more into public transportation

There are multiple new developments happening in Silicon Valley’s public transportation sector. The California commuter rail Caltrain is well on its way to swap out its diesel-powered trains to electric ones. BART, often known as the Bay Area Rapid Transit system, will extend its line from Santa Clara through San Jose. Finally, San Jose city officials will select a transportation provider later this year to build a new transit line. But in order to connect Diridon Station in San Jose with the San Jose International Airport, it is expected to pass through or close to the new Google site, where Google expects to build 7.3 million square feet of new office space, as well as a community center, 15 acres of parkland, and 4,000 new residences. Numerous businesses have since expressed interest in operating on the new route, including tunnel-boring company Elon Musk’s Boring Co. 

Aversion to long commutes is often cited by office workers as the main reason why they don’t want to return to in-person work full-time, so it’s no wonder that new transportation hubs are causing a boom in Silicon Valley’s office expansion. Perhaps cities with low office-to-return rates may want to take note.

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