The 50 acres of land Apple announced last week it had purchased in Cupertino has an assessed value of US$160 million, Michele Chandler reported for the San Jose Mercury News on Tuesday. While the company wouldnit speak to the purchase process nor how much it will cost to knock down the existing buildings and put up new ones, two real estate experts told her that construction will easily come in around $500 million.
"That would make the companyis second campus one of the costliest Silicon Valley commercial ventures in recent memory," Ms. Chandler wrote. She quoted NAIBT Commercial as saying that Cupertinois office space vacancy rate is 7.7%, while itis 12.6% across Silicon Valley.
Ms. Chandler also noted that Apple was secretive about its plans, which is typical for any company that doesnit want its competitors to know what itis up to. The development firm Hines Interest worked with Apple, grabbing the various properties that will be stitched together for the new campus, including an eight-acre parcel that had just been purchased in February by a developer looking to put townhomes and apartments there.
Apple closed on that particular purchase just hours after CEO Steve Jobs made a last-minute appearance before the Cupertino City Council to announce the plans. Now that the company has all that land, however, it must now put together development plans for city approval and could be forced to have the property rezoned for commercial use, since part of it had been originally zoned as residential.