Tech Giant Grabs Sunnyvale Big-Box Store Site for $100M

The Silicon Valley sites of an electronics chain that filed for bankruptcy and abruptly shut all of its stores during the online shopping boom in 2021 continue to be scooped up for adaptive reuse projects.

According to documents filed this month in Santa Clara County, tech giant Applied Materials has closed on a $100M deal to acquire the 13.6-acre site of a 152K SF big-box Fry’s Electronics store at 1077 East Arques Avenue in Sunnyvale, The Mercury News reported.

The premium purchase by Applied Materials is the latest addition in a five-year acquisitions binge that has seen the Santa Clara-based semiconductor equipment maker spend nearly $400M to buy or lease properties encompassing two dozen buildings and an estimated 2M SF along a four-mile stretch near Central Expressway in east Sunnyvale and North Santa Clara.

The Sunnyvale holdings, which include a tech campus formerly leased to Apple on East Arque Avenue that was purchased by Applied Materials in 2019 for $100.9M, are expected to be part of the company’s plan for a massive complex of facilities devoted to semiconductor process innovation and commercialization.

Applied Materials, which makes the machines that make silicon wafers measured in molecular nanometers, announced last year it plans to build a $4B research facility known as the EPIC Center on its Santa Clara campus.

The name of the new research center, EPIC, is short for “equipment and process innovation and commercialization.” The facility will enable chip manufacturers and academic researchers to test new chip designs on a production line with the most advanced equipment. With cleanroom space the size of three football fields planned for the facility, competing semiconductor manufacturers will be able to conduct research in separate sections of the center at the same time.

The EPIC facility will rival the Albany NanoTech Complex at SUNY Poly’s College of Nanoscale Science and Engineering as the most advanced chip-design research facility in North America, tapping into Northern California’s leading research universities, including Caltech and Stanford.

Last week, Sterling Organization filed plans to convert a former Fry’s Electronics store in Fremont into an advanced manufacturing and tech research facility. The West Palm Beach-based firm bought the store site at 43800 Osgood Avenue in June for about $38M, or $248 per SF.

Sterling plans to fully renovate the 143,800K SF big-box building and expand it with a new façade and a 7,500 SF mezzanine.

In February, Super Micro Computer, a rising info tech firm with revenue of more than $7B, acquired a 20-acre site for $80M in North San Jose that was the iconic headquarters of Fry’s Electronics, a landmark consumer store known for its Mayan-themed décor.

Super Micro bought the site from an affiliate of Bay West Development along with entitlements from the city that will allow it to build a 1.9M SF office campus.

Bay West received approval from the San Jose Planning Commission in January 2023 to build a cluster of seven eight-story office buildings on the site of the electronics store at 550 East Brokaw Road near the 1-880 interchange. Also approved were two parking facilities encompassing 1.6M SF.

However, Bay West’s plans later changed, and the developer tapped Newmark to market the property for industrial or light manufacturing use. The existing structures at the site encompass 294K SF, including a warehouse and office that served as the corporate headquarters for Fry’s and the San Jose SaberCats arena football team.

In an SEC filing in February, Super Micro signaled that it intends to follow through on the original plan to demolish the structures and replace them with a huge tech office campus.

A former Fry’s Electronics store in Concord is now operating as the Urban Air Trampoline and Adventure Park. Campbell Bintang Badminton and The Hub Pickleball are operating at a former Fry’s store in Campbell.