Tech company secures deal to sublease vacant office buildings in South Bay

A recent business deal in Santa Clara involves a tech company subleasing office space from another tech firm, marking a significant shift in the real estate market. Zscaler, a cloud-based cybersecurity company, has entered into an agreement to sublease two office buildings located on Great America Parkway in Santa Clara. These buildings, with addresses at 4301 and 4401 Great America Parkway, were initially leased by Airbnb in 2020 but never occupied. The properties collectively offer approximately 301,000 square feet of office space, with each building comprising around 150,000 square feet.

The decision to sublease these office spaces reflects a positive development in the Bay Area’s real estate landscape, which has been marred by high office vacancy rates, loan defaults, and foreclosures. For Zscaler, this move may signify a strategic expansion, considering the company’s prior leasing of 172,000 square feet in north San Jose at 120 Holger Street in 2019, where its headquarters are located. Despite facing a loss of $15.5 million on revenues of $2.42 billion over the past year, according to Yahoo Finance, Zscaler is optimistic about its future prospects. The company is expected to occupy its new office facilities sometime next year, with the sublease agreement extending from September 1, 2026, to April 30, 2032, as mentioned in the regulatory filing submitted to the Securities and Exchange Commission.

The office market in the Bay Area has been grappling with challenges due to the ongoing impact of the pandemic. However, this particular sublease deal presents a ray of hope amid the prevailing uncertainties. The properties at 4301 and 4401 Great America Parkway now have new potential, with Zscaler poised to utilize these well-appointed office spaces effectively. The buildings, owned by The Sobrato Organization’s affiliate, hold promise for productive business operations in the future, giving a fresh lease of life to these previously unoccupied properties.

As Zscaler gears up for its relocation to the new premises in Santa Clara, the company is set to embark on an exciting phase of growth and innovation. With a strategic vision and a commitment to excellence, Zscaler is ready to make its mark in the South Bay office complex. This sublease agreement marks a significant milestone for Zscaler, underscoring the company’s resilience and adaptability in navigating the evolving real estate landscape of the Bay Area.