Start-Ups Are Drawn to Pulse of Downtown

Many Silicon Valley start-ups are increasingly hankering for downtown, urban offices.

The shift can be seen in Redwood City, where many tech companies long have made their homes–but primarily in the Redwood Shores office parks where Oracle Corp. and Electronic Arts Inc. are headquartered. This year, a trickle of start-ups has moved into downtown Redwood City, with digital ad companies Turn Inc., YuMe Inc. and compensation research firm Equilar Inc., among others, relocating to the area since January.

“We used to be located in the Redwood Shores area, but I didn’t like it because it was too remote,” says Bill Demas, chief executive of Turn, which moved into a 10,000-square-foot office in the restored late 19th-century Alhambra building in downtown Redwood City in January. “We wanted to be in a more urban location, we wanted more restaurants and bars near us.”

Redwood City is just the latest beneficiary of a downtown migration by start-ups. In Mountain View, demand is high for offices around its downtown Castro Street area. In Palo Alto, start-ups are seeking space around lively University Avenue. Commercial vacancy rates are particularly low in the downtown areas of some Silicon Valley towns, with downtown Menlo Park’s prime office space just 3.3 percent vacant in the second quarter compared with the city’s overall 14.8 percent commercial vacancy rate, according to Cornish & Carey Commercial Newmark Knight Frank.

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