Drawbridge Realty Acquires Fully Leased Sunnyvale Office Building for $219M Amid AI-Driven Demand

Drawbridge Realty recently completed the acquisition of a 180,000 square foot, two-year-old office building located at 100 Altair Way in Sunnyvale for $219 million, equating to $1,213 per square foot. The property is fully leased to Databricks, an AI company that has significantly expanded its presence in the South Bay, now occupying 635,000 square feet across multiple Sunnyvale locations, including 455,000 square feet at Sunnyvale Cityline.

This transaction highlights a broader trend of AI-fueled growth driving up prices for prime office assets in Silicon Valley and the wider Bay Area. Another recent deal saw a Bluerock affiliate acquire a 319,000 square foot office building at 1133 Innovation Way in Sunnyvale for $330 million, or $1,034 per square foot. While some Q3 office acquisitions in the region traded lower, institutional capital is actively pursuing opportunities in the San Francisco Peninsula and Silicon Valley due to the area's strong AI sector and limited new development.

According to Kidder Mathews, Silicon Valley's office vacancy rate dipped to 15.9% in Q3, with 491,000 square feet of net absorption. Total leasing volume for the quarter reached nearly 3 million square feet, a 97% increase year-over-year, indicating robust market activity driven by companies like Figure AI and OpenAI also expanding their footprints in San Jose and Mountain View. Developers and investors should note the sustained demand for high-quality office space in key tech hubs.