Apple campus may cost more than $500m

Apple's recent purchase of 50 acres in Cupertino for a second campus is valued at over $160 million, but total costs may end up topping $500 million before the iPod-maker's brand new campus is completed. The Mercury News reports that the price of the property is just the beginning, adding that by the time Apple demolishes the site's old structures and builds new offices for nearly 3,500 employees over a four year span, the company's costs could exceed the $500 million mark. Business space in Cupertino is among the most sought-after in the Bay Area, with a mere 7.7 percent vacancy rate. "Fifty-acre parcels are generally not that available in Silicon Valley," Foresight Analytics partner Matthew Anderson said.

"You can't buy 50 acres, you have to piece it together. So if you're Apple and you're going to go through the trouble of putting it together, you might as well pick an area you want to stay in, as opposed to one further away where you might save money but it will be just as difficult to assemble."

Apple currently employs workers in around 30 buildings strung out across Cupertino, according to city officials. Consolidating on one large campus will save Apple money, as well as maintenance and security costs, according to the report.

Security is a major concern for Apple, which guards company secrets closely and aggressively pursues legal action against individuals and companies who attempt to disclose confidential information. Apple is currently involved in a legal struggle to discover the identity of a journalist source who leaked information about a new product, and faced questioning from judges on Thursday last week regarding its pursuit of information. Anderson points to the company's security issues as a possible strength in the move.

"From a security standpoint, it is easier to secure their intellectual property and their new ideas in a campus setting than one where all their people are spread out," Anderson said.

Anderson also points to convenience as a positive side to the costly endeavor, noting that the company can save time and money through consolidation.

"In a campus setting, it's more of a secluded feel, as opposed to a high-rise," the real estate expert added. "Plus, there's room for other facilities and amenities, such as more parking or a soccer field. When groups are working together, they don't have to get on a bus and drive to another building, they can just walk."

The property, which is bounded by Interstate 280, Pruneridge Ave., North Wolfe Rd., and Tantau Ave. was pieced together by Apple and development firm Hines Interests, who secured the properties for the new campus.

Hines last week bought an eight-acre parcel of land bordered by Pruneridge Avenue and I-280 from Palo Alto real estate developer SummerHill Homes, which had previously rezoned the property to permit housing.

Cupertino City Manager David Knapp said that Apple probably "paid a little more, especially with the entitlements and housing being as hot as it is now," according to the report.