Applied Materials widens Silicon Valley shopping spree with new deals

SUNNYVALE — Applied Materials has widened its shopping spree for expansion space in Silicon Valley through a property purchase in Sunnyvale and office rental deals in Santa Clara.

The tech titan has now spent roughly a quarter-billion dollars buying sites in Sunnyvale over a four-year stretch that has produced a remarkable buying binge for properties in the vicinity of the company’s Santa Clara headquarters.

In the most recent property purchase, Applied Materials paid $9 million for a smaller industrial building at 230 Commercial St. in Sunnyvale, according to documents filed on May 31 with the Santa Clara County Recorder’s Office.

Applied Materials now has spent at least $248.7 million buying an assortment of properties in Sunnyvale.

The maker of equipment to produce semiconductors and displays has also turned to sublease deals to expand its footprint in its hometown of Santa Clara.

In recent weeks, Applied Materials subleased 246,000 square feet of space from Aruba Networks at 3333 Scott Blvd. in Santa Clara, taking that entire office building. In February, Applied Materials subleased 122,000 square feet at 3325 Scott from Palo Alto Networks.

The quest by Applied Materials to collect properties in Sunnyvale began in August 2018 when the tech firm paid $41.4 million for a building at 928 E. Arques Ave.

The largest single deal in the Applied purchasing efforts in Sunnyvale occurred in 2019 when the company paid $100.9 million for a tech campus of big office buildings leased to Apple with addresses ranging from 1050 through 1090 E. Arques Ave.

In the most recent transaction in late May, Applied Materials bought the 230 Commercial building that totals about 18,100 square feet through an all-cash deal, the county documents show.

But as appears to be the case in nearly all of the company’s property acquisitions in Sunnyvale, the real value for Applied Materials may be the land beneath the building.

The just-bought building on Commercial Street sits on a site that totals 2.1 acres, which means the building is on a lot that’s very large for the size of the structure.

It could be possible to use modern-day density rules to construct a building that totals 64,000 square feet — nearly four times the size of the existing building.

Plus, a number of the properties that Applied has bought in Sunnyvale could form contiguous sites if woven together into larger parcels.

Multiple tech companies have attempted to assemble properties in Sunnyvale to create places where they could expand in the future in the South Bay city, which is a tech hub.

LinkedIn, Intuitive Surgical, Google, Fortinet, Apple and Amazon, along with Applied Materials, have been grabbing Sunnyvale sites for expansion in an array of ways. Amazon has primarily rented offices. The other companies have also bought properties.