Netflix Inc.'s stock might be on a roller-coaster right now, but its real estate footprint has a pretty stable trajectory: Up.
The streaming media giant last month quietly sealed a deal to expand into two more buildings at a new office complex under construction in Los Gatos. The lease fills gives Netflix complete occupancy of the 485,000 square foot project, a joint venture of Sand Hill Property Co. and the Carlyle Group.
Get A.M. business scoops. Subscribe to SVBJ's free morning email newsletter.
I mentioned the expansion in a story today on Netflix subleasing its existing Sobrato-owned campus to Roku Inc., but felt the deal is significant enough to warrant its own post.
The new office park, called the Grove, was approved in 2013 after a painful entitlement fight and legal challenges. Netflix at that time signed for two of the four buildings in the complex, or 242,500 square feet, and retained an option on the other two. The first two buildings are now reaching completion.
Netflix confirmed for me last month that it signed for the next two buildings, which are slated to get underway soon. I couldn't learn anything about the terms of the deal.
Meanwhile, those first two buildings are about to be sold to an affiliate of CBRE Global Investors for a princely sum — $192 million, or $730 per square foot, according to a report on The Registry. JLL is handling the sale. We reported that the project's first phase was up for sale back in May.
At full buildout, Netflix could have just under 2,000 employees in the new campus assuming a space utilization rate of one worker per 250 square feet. (Caveat: I dislike such calculations because corporate real estate strategies vary so widely.)
The Grove is located across Highway 85 from Netflix's 160,000-square-foot existing campus. Netflix is subleasing that project to its streaming-media industry colleague Roku Inc., which is moving from Saratoga. Roku will occupy it early next year.
Netflix's stock has been hammered in the last few weeks, down 21 percent since its highs earlier this summer, as of Sept. 4. But the company is on a hiring binge. It listed 118 open positions in Los Gatos on its jobs page this week. And it's also expanding elsewhere. On Aug. 27, the company announced it leased 200,000 square feet at a project in Hollywood called ICON. It's being developed by Hudson Pacific Properties, the REIT that made a huge splash here this year by buying the Bay Area Equity Office portfolio.