Professional networking platform LinkedIn paid $323 million to buy its corporate headquarters in Silicon Valley, paying well above market price to deepen its stake in the region's commercial property sector in a further sign of technology companies investing in offices even amid talk of staff working remotely.

The platform owned by Microsoft acquired the two-property campus in Sunnyvale, California, it had been leasing for the past half-decade in a move that not only transitions its role from tenant to landlord, but confirms its commitment to long-term expansion in the greater San Francisco Bay Area. A LinkedIn spokesperson confirmed the sale to CoStar News, but declined to discuss the transaction further. DWS, a Deutsche Bank affiliate and the properties' former owner, did not respond to requests for comment.

The sale price for the property, which encompasses nearly 287,650 square feet, equates to just shy of $1,123 a square foot. The per-square-foot average for office sales in the greater South Bay area hovers just above $500, according to CoStar.

LinkedIn's willingness to pay more than double the regional per-square-foot average for its headquarters at 950, 1000 and 1020 West Maude Ave. is the latest sign that Silicon Valley's roster of tech titans are stepping back into their roles as the area's leading source of commercial real estate investment, development and pricing growth.

Companies, such as Mountain View, California-based Google, pushed their expansion plans to the back burner at the onset of the pandemic in early 2020. However, those plans have since been rebooted, kicking off a string of recent acquisitions, lease renewals and construction projects that affirm their footholds in the South Bay area.

The accelerating corporate investment in regional real estate suggests that Silicon Valley's office market is on the mend from the devastating economic impact of the dual health and financial crises. What's more, it shows that the area, which has been dominated with news of remote-work trends and the adoption of hybrid schedules, is standing up to long-term workplace changes that may not result in all employees returning to the office.

LinkedIn itself has said its workforce can operate remotely roughly half of the time, in line with the policy of its parent Microsoft. Another tech firm, Apple, which is headquartered a short drive away from LinkedIn's own Sunnyvale hub, has also announced a hybrid work plan for its staff. That company signed Silicon Valley's largest pandemic-era lease back in late May in a move that set the stage for the philosophy that tech companies could lead premier U.S. office markets out of their COVID-19 slumps.

Downtown West, Google's largest real estate project and investment to date, was recently approved by city officials in San Jose, California, and is set to accelerate the revitalization of the city's downtown area with as much as 7.3 million square feet of office space, 4,000 housing units, a hotel, retail space and other features over the course of the $1 billion-plus proposal's timeline.

Tech-Fueled Rebound
For the greater Silicon Valley area, in particular, LinkedIn, Apple, Google and other tech giants' recent expansion plans mark their commitment to physical office space at a point when a mounting wave of tech and traditional office tenants alike have been shedding space at record rates. Some of the region's largest employers including Salesforce, Dropbox, Coinbase and Square have dumped hundreds of thousands of square feet on the Bay Area's sublease market throughout the course of the pandemic.

Over the past year, former Silicon Valley-based software companies such as Oracle Corp. and Palantir have uprooted their global headquarters to relocate to cheaper pastures, fueling concerns that the South Bay's tech-dominated prowess would be diluted by an exodus of office tenants. However, recent leases and acquisitions, combined with a pipeline of development and expansion plans among the region's largest companies, underscores their commitment not only to growth, but more specifically to growth in the Bay Area.

Recent investments in the Silicon Valley market has already resulted in the near doubling of the local sales volume in the Sunnyvale area, according to CoStar data. The bulk of that activity has stemmed either from tech companies' tenancy in a property or from the tech companies themselves.

Real estate firm Brookfield Property Group shelled out $630 million back in April for two office properties occupied by social media platform Facebook. Months before, investor Blackstone snapped up streaming platform Roku's San Jose headquarters for $275 million.

Accelerating growth and record-breaking revenue streaks over the past several years and in particular throughout the pandemic have pushed the tech companies that occupy the region to join local, national and global investors vying for a larger chunk of the area's office sector. Historically, tech companies and other owner-occupants have made up about 15% of the region's sales activity, according to CoStar. The balance has steadily shifted, however, and that stake has since expanded to 20% of the area's purchase activity.

LinkedIn's purchase of its Maude Avenue corporate campus coincides with the company's growth plans. Over the past five years, the social media platform's Sunnyvale workforce has ballooned to more than 3,550 today from about 1,850 employees, according to city data.

In addition to its recently acquired headquarters, the company owns or leases roughly 1.8 million square feet of office space throughout the Bay Area, much of which is concentrated around Sunnyvale.

It is also in the process of constructing a 1.1 million-square-foot office campus in nearby Mountain View, California, at 700 East Middlefield Road about half a mile away from its West Maude hub. Once complete, the three new six-story office buildings spread across nearly 29 acres will become the company's new headquarters.