Netflix signs on for two new buildings in Los Gatos, construction starts

Scott Eells

Netflix will stay in Los Gatos, having leased two buildings to accommodate its recent growth. Photographer: Scott Eells/Bloomberg

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Nathan Donato-Weinstein: Real Estate Reporter- Silicon Valley Business Journal; Email | Twitter

Ending weeks of speculation, Netflix Inc. has signed on to a Los Gatos expansion — and it's streaming into the space in a bigger way than originally planned.
The company has agreed to lease two buildings, totaling 242,500 square feet, to be built at a new campus off Albright Way in the West Valley town. Construction work will begin immediately. This is up from a previous deal that had Netflix taking down just one of the four planned buildings on the campus.
A Netflix spokesman confirmed the deal to me on Thursday.
The deal, which was consummated on Aug. 28, comes two weeks after a Santa Clara County judge officially rejected a community group's last-ditch effort to challenge the town's zoning of the new campus and upheld the approvals.
The sometimes strident opposition to the project had delayed original plans for the campus by many months, and a previous lease — for just one building — was no longer in effect by the time the town council approved a scaled-down version earlier this summer.
But it's now all systems go, said developer John R. Shenk, who represents property owner LG Business Park LLC. The project is a joint venture between Cupertino-based Sand Hill Property Co. and the Carlyle Group.
"There were a few people who felt strongly they didn't want anything built, but we were able to overcome that," Shenk said Thursday morning. "We're just happy that Netflix was still interested, the town gets to keep Netflix, and we get to build some beautiful new buildings for them."
The deal — and start of construction — cap a multi-year story arc for the project. Netflix already leases about 160,000 square feet across the freeway from the Sobrato Organization, but has been packed to the gills in that space for some time, looking to expand.