updated 10:24 pm EST, Wed November 28, 2012
Facility will house 1,200 employees, may not be temporary
Developer Peery Arrillaga has struck a deal with Apple to build two buildings to the iPad maker's specifications for what may be a long-term lease or a new permanent facility in addition to the planned "spaceship" Campus 2 that will be built in Cupertino. The new buildings will be in Santa Clara, just outside Cupertino, marking the first time the company has committed to a long-term lease in that city. Apple is already leasing overflow office space in Cupertino and Sunnyvale as well as it struggles with its expansion.
One of the side-effects of Apple's relatively rapid growth over the last 10 years has been a significant expansion in its workforce, which has resulted in Apple having to lease short-term office space all around its main headquarters. In Sunnyvale alone, the company controls a million square feet and is housing 5,000 workers. The new facility in Santa Clara, when complete, will occupy 296,000 square feet and house some 1,200 employees.
Also revealed in the story reported by the San Jose Mercury News is that Apple is beginning to sign longer-term leases, indicating that the company is considering its latest expansion offices as more permanent facilities. This in spite of the fact that its new Campus 2 headquarters' plan has been revised to house up to 14,000 employees, an uptick from the 12,000 originally envisaged. The Campus 2 building, known for its "ring" shape, is now thought to be delayed by various regulatory obstacles until at least mid-2016 -- and even that is seen as optimistic.
The deal with Peery Arrillaga called for the demolishing of the existing buildings, and ground has been broken on construction of the two new buildings, built specifically to suit Apple. The first will be 188,000 square feet and should be completed by mid-2014. The second building will offer about 108,000 square feet, but has no target set for completion yet.
It is likely that engineers working in temporary leased space around Santa Clara and other nearby cities currently would be moved into the new facility when complete. Apple's earlier leases for office space outside its main headquarters were shorter-term leases (three to five years in nature), many of which will expire before the Campus 2 building is likely to be completed.
According to real estate professionals and market analysts, despite the continuing issues with finding suitable facilities to house its employees, Apple is continuing to hire as it expands various teams, including its Maps staff, Siri team and chip engineers. In addition to various buildings in and near Cupertino, Apple also has a campus in Austin, TX as well as Israel, and is expanding an administrative facility in Ireland.