IPhone-maker Apple’s spaceship-esque headquarters in Cupertino, California, is one of the most distinctive buildings in Silicon Valley, and now, a few years after its completion, the property has been given a valuation that makes it one of the rarest in the nation.
Figures released by the Santa Clara County Assessor office show the 2.8 million-square-foot Apple Park, at 1 Apple Park Way , is worth $3.6 billion, one of the priciest property values in the country. It's a sign of the jaw-dropping dollar figures that can be attached to the fanciest real estate of tech companies.
The building's value puts it in the ranks of properties such as One World Trade Center in New York, which cost $3.9 billion to build, according to the Port Authority of New York and New Jersey. It surpasses San Francisco's tallest tower, the Transbay Tower at 415 Mission St., occupied by client relationship management software company Salesforce and assessed at $1.7 billion, including the structure and the land, according to the San Francisco County Assessor. The two-year-old Wilshire Grand, the tallest tower in Southern California at 900 Wilshire Blvd. in downtown Los Angeles, cost $1.2 billion to build, according to the developer.
Apple's headquarters' value is even higher than what is believed to be the priciest sale of an office building in American history: the $2.9 billion sale of the General Motors building in New York to Blackstone Group in 2008. It also eclipses the $2.4 billion sale of New York's 1.89 million-square-foot Chelsea Market to tech giant Google last year, which was the second-most expensive office sale, according to CoStar.
As a single building, Apple's headquarters is unique among tech companies. Most Big Tech firms such as social media company Facebook and search engine provider Google occupy campuses with multiple buildings on several acres of land, making it difficult to compare their properties' values to a single building such as Apple's.
Apple's entire campus, which reportedly cost $5 billion to build, is sleek and modern, much like the aesthetics it strives to achieve with its products. The Norman Foster-designed building's glass walls and steel columns mimic the look of iPhones and MacBooks, according to the Wall Street Journal. The four-story structure, built in a ring around a central quad space, opened in 2017.
Apple itself knows how intriguing the campus may be to the public. It even built a visitor center where the public can shop, eat and attend events.
Large companies, especially those with unique real estate that is hard to value because comparable properties are rare or nonexistent, often dispute their valuations after reassessments occur to try to keep their property taxes down, and Apple is no different. The company has been disputing its valuations since the early 2000s, according to news reports.
Remaking Silicon Valley
Despite Apple’s disputes over its property’s value, it’s clear that real estate developed by Apple and its cohorts has remade the Silicon Valley landscape when it comes to valuations and the resulting tax collections.
The assessment roll in Santa Clara County hit $516 billion after the annual tallying, according to the county assessor, led by tech company real estate. In addition to Apple, social networking company LinkedIn, software-maker Adobe and Google all have major presences or headquarters in Santa Clara County, driving the growth.
Santa Clara County is undergoing its longest period of growth in decades, County Assessor Larry Stone said in a statement, but the tide could turn in the next few years.
“There are early indicators that the economy may be in transition if for no other reason that we are due for a recession,” Stone said in a statement. “We are seeing a marked increase in for-rent or -lease signs outside of major apartment complexes, in addition to concessions such as free rent and reduced deposits to attract tenants, a clear signal that the peak of the apartment market has passed.”
The same trends are seen in the office market, he said.
“The unsustainable and frenzied leasing activity of 2015 and 2016 has slowed, in part, as a result of the significant increase in the supply of new office space,” Stone said. These changes are likely to result in a slowing of assessment roll growth in the coming years.
Office vacancy rates in Cupertino are low, about 2.5%, according to CoStar data, with only a small amount of new space constructed in the past 10 years, apart from Apple Park, which was completed in 2017.