From San Jose to South San Francisco, tech and biotech companies have been building or acquiring millions of square feet of property. The latest economic boom has led to tech companies owning more real estate and paying millions in property taxes. Silicon Valley’s top 50 property taxpayers paid over $313M in taxes each year, according to a report from CommercialCafé.
With many more projects in the works, these tech companies will likely pay more taxes in the future.
The building of new office and residential also led to a 7.37% increase in total property assessment in Santa Clara County to $450B as of Jan. 1, 2017, according to The County of Santa Clara. In San Mateo County, property assessment reached $206B.
For more than six years, Silicon Valley has posted 26 consecutive quarters of positive office development and leasing. Santa Clara County reached a 4.1% rate of job growth, according to Santa Clara County Assessor Larry Stone. The six years of growth was slightly offset by a 21% increase in tech layoffs in 2016, which led to a flattening of growth in assessed real estate values from the previous year. The current economic cycle is nothing like the dot-com boom of the late 1990s, according to Stone.
“High tech startups with little or no earnings frequently leased far more space than they needed, which contributed to the dot-com bust,” Stone said in the report. “Today, well established companies like Google, Apple and Samsung with real earnings and profits are acquiring land and buildings, favoring ownership over long-term leases.”
Check out the top five tech-owned properties paying the most in San Mateo and Santa Clara counties.
Tax Value: $21.5M
Total Parcels: Eight
As 12,000 employees move into Apple’s new circular headquarters, previously known as the Apple Spaceship, Apple will be paying an additional $21.5M in taxes for this 175-acre site. The four-story, 2.8M SF office cost $5B to build and will have one of the world’s largest solar energy installations.
Apple also had two other properties within CommercialCafé’s top 50 list, with the tech giant paying $10.3M for its previous headquarters at 1 Infinite Loop and $4.7M for its Newark Data Center in Newark. Apple pays over $36M in taxes for all three of these properties.
Tax Value: $20.3M
Total Parcels: 30
Location: South San Francisco
Genentech’s headquarters in South San Francisco houses 10,000 employees and one of the largest biotech companies in the Peninsula. The company owns 47 buildings at the site, which includ es research centers, manufacturing facilities and other business capabilities. The biotech giant also has offices on a 100-acre site in Vacaville that houses 427K SF of manufacturing, maintenance, labs, offices and warehousing.
Tax Value: $19.8M
Total Parcels: Four
Tesla acquired the old General Motors and Toyota New United Motor Manufacturing plant in 2010 and has transformed the facility into one of the most advanced automotive plants in the world. The 370-acre site houses a 5.3M SF factory, which has been manufacturing Model S vehicles since 2012. The electric vehicle maker also began rolling out Model 3, a more affordable EV model, earlier this summer, and the company expects to eventually produce over 500,000 Model 3 vehicles each year by 2018. Fremont has approved an expansion that would bring the factory to 10M SF and allow the company to reach its production goals.
Gilead Sciences Campus
Tax Value: $16.3M
Total Parcels: 36
Location: Foster City/San Mateo
Gilead purchased its Foster City headquarters from an Equity Office subsidiary in 2003 for $123M when it only occupied eight of the 16 buildings on the campus. The biotech company eventually expanded into the remaining buildings and its campus spreads across 72 acres. It also bought 12 additional acres for $120M near its Foster City headquarters in 2015 and plans to build another 800K SF.
Tax Value: $14.6M
Total Parcels: 45
Location: Mountain View
Google originally purchased the property for its headquarters in 2006 for $319M ($630/SF) from Goldman Sachs Asset Management. Google also has five other properties within the top 50 — 1240 Crossman Ave. in Sunnyvale, Google Pacific Shores Center in Redwood City, Google Building RLS1 in Mountain View, Google Bayhill Office Center in San Bruno and the Google Palo Alto Cluster. The tech company pays over $44M in property taxes for the six properties.