Apple’s Expansion Is Latest Sign That Tech Spillover From Bay Area Is Rising

Expansion of the Apple Inc. campus in Elk Grove is just the latest sign that the Sacramento region is gaining traction with technology employers after a long period of stagnation.

For the past five years, as Bay Area office lease rates have skyrocketed, real estate and technology observers in Sacramento could only look on with envy. Spillover benefits seen in past booms haven’t materialized.

That may be changing. Apple (Nasdaq: AAPL) is now converting one of its warehouses into a logistics center, a move that will add perhaps several thousand jobs. And several other tech companies have located or added space in Folsom and Rocklin in recent months.

“In technology today there is a lot more on-shoring of back office and vendors,” said Chris Strain, broker with Cushman & Wakefield. “The price advantage of doing business overseas or sending it to Austin has diminished. They want those services close to the market and close to the headquarters.”

And high prices mean that “back office is being squeezed out of the Bay Area,” he said.

That’s where Sacramento comes in. Here are some recent developments:

Toshiba Corp. at the end of November said it plans to hire up to 60 employees at a new company research and development office in Folsom. Robert Reed, the company’s vice president of data center and solid-state drive engineering, said in November that Toshiba would like to hire even more employees in Folsom, where there is a deep pool of engineering talent in the workforce.

Also in November, Irish customer service firm Voxpro said it would establish a new call center in Folsom providing high-level technical support representatives for companies such as Airbnb and Google. It plans to have 100 employees by the first quarter and eventually grow up to 750 workers. It is moving into a building that Verizon had used until 2013 for the same purpose. Voxpro will start with 15,000 square feet of the building at 255 Parkshore Drive, and the company has the option to lease an additional 15,000 square feet in the 60,000-square-foot building.

Rancho Cordova-based school data system provider PowerSchool said in November it is moving from its Rancho Cordova headquarters to Folsom by the end of January. The new site, also on Parkshore Drive, can hold up to 450 employees. The company manages student information systems for about a quarter of all school districts nationwide, mostly for such functions as grades and attendance. It is owned by Vista Equity Partners, which could have moved those jobs anywhere.

Santa Clara-based Agilent Technologies Inc. (NYSE: A) in August said it would be expanding in Folsom — adding offices, labs and warehouse space in a building it bought at the end of last year. The company said at the time it would be adding 60 positions in Folsom by the end of the year. Agilent for years has had a building at 91 Blue Ravine Road. The technology company in December last year bought a neighboring 53,000-square-foot building at 101 Blue Ravine Road, which had been vacant since the California System Operator moved out of it in 2011.

Oracle (NYSE: ORCL) this summer leased an entire 31,000-square-foot floor in the Rocklin Corporate Center on West Oaks Boulevard. The Redwood City-based technology giant has had offices in Rocklin for 20 years, but like many technology companies, its local presence has waxed and waned over the years. The Rocklin Corporate Center is a block from office space Oracle leased two years ago in the office building at 1400 Stanford Ranch Blvd. And that building is across the street from Oracle’s building at 1001 Sunset Blvd.

Source: Sacramento Business Journal, Mark Anderson
Photo: Apple, Oracle, Agilent Technologies, and Toshiba, which in November signed a lease in this building at 35 Iron Point Circle in Folsom, are all examples of huge tech firms expanding or relocating in the Sacramento region. (NEWMARK CORNISH & CAREY)