SAN JOSE — A new San Jose office building next to Santana Row has landed its first tenant, a deal that offers a bright counterpoint to the gloom that has darkened the Bay Area’s struggling office market.
Acrisure, a fast-expanding financial technology and insurance company, has leased 29,000 square feet in One Santana West, a new office building in the Santana Row mixed-use neighborhood.
“We’re excited about the new offices,” said Jennifer Anderson, managing partner with Michigan-based Acrisure, which is leasing part of the second floor in the One Santana West building across the street from Santana Row. “The walkability to Santana Row and the amenities are huge.”
Federal Realty Investment Trust is the principal developer and owner of One Santana West as well as adjacent Santana Row, a mixed-use neighborhood of restaurants, shops, offices, homes, hotel rooms and entertainment hubs that has become a regional destination.
“We probably had about a six-month search for office space,” said Dan Michelini, an Acrisure managing partner. “We decided this was the appropriate location and space to launch our regional headquarters.”
Acrisure expects to move about 150 workers to the portion of the second floor in the building that the company leased. One Santana West is located at 3155 Olsen Drive next to South Winchester Boulevard.
“Santana West offers the ideal combination for companies seeking modern and efficient workspace and the deepest set of amenities and services available,” said Jan Sweetnam, executive vice president and chief investment officer with Federal Realty.
When Federal Realty launched the development of One Santana West, the real estate firm gambled that it would attract one or two big tech companies to lease the entire building, which totals 375,000 square feet.
The plans for a big tech tenant to occupy all of One Santana West were put in place before the outbreak of the coronavirus.
However, in the wake of the appearance of the deadly bug, a growing number of tech companies chopped jobs, put their offices up for sublease and generally curbed their respective appetites for new workspaces.
These new dynamics prompted Federal Realty to formulate a new strategy in 2022. The company decided it would offer smaller chunks of space in One Santana West as a way to attract multiple tenants to the new building.
Acrisure intends to integrate eight existing offices in Northern California into the regional headquarters site in San Jose.
“As a fintech, we needed to be in Silicon Valley and have a presence here,” Anderson said.
Acrisure expects to be in its new offices sometime around mid-April, company executives said.
“Federal Realty has done a tremendous job of building out the amenities in the building and at Santana Row,” Michelini said. “We think it will be a great place for our employees to work hard but also take breaks and stay in shape. It’s a central location for our employees and a place for them to continue to build the organization’s culture.”
Privately held Acrisure appears to be on a path of rapid growth. Founded in 2005, Acrisure in 2013 generated $38 million in yearly revenue, company executives said. In 2021, annual revenue climbed to $2.8 billion, a Wikipedia post states. In 2022, revenue totaled $3.5 billion. Revenue in 2023 is expected to total $4.4 billion, company executives said.
Now, the company hopes to see even more growth with its new location at Federal Realty’s One Santana West building.
“Federal Realty was fantastic to work with,” Michelini said. “They are true professionals. They understood our needs. We anticipate the buildout of our space will go smoothly. Right around tax time, we should be up and running in this office.”
As Acrisure scouted the region for suitable office sites, the company brought in more of its employees to help form a consensus about the various locations it was checking out. One Santana West wowed the workers.
“The resounding response was to put our new office at Santana Row,” Anderson said. “The enthusiasm around this new location is very high.”