Sunnyvale is being hailed as a Bay Area city that has found the right balance in downtown development, successfully combining office space, housing, and retail into a thriving hub of activity. At a time when many neighboring cities are struggling with high office vacancy rates and hesitation about new construction, Sunnyvale’s approach has created a formula that is proving to be sustainable and attractive to both residents and employers.
City officials believe that the key to their success lies in embracing a live, work, and play model that prioritizes interconnected development rather than focusing heavily on one element. By building housing to support office workers and ensuring that retail amenities complement both, the city has created a downtown that feels complete and inviting. District 2 Councilmember Alysa Cisneros, who represents the area, said she expected some initial anxiety about the office-heavy development, but was not surprised to see demand quickly rise. She explained that Sunnyvale’s willingness to develop diverse building types and integrate them has allowed the city to avoid the challenges other cities face when they rely too heavily on either housing or office construction alone.
Recent market reports appear to validate this approach. Cushman and Wakefield’s second quarter 2025 analysis showed Sunnyvale’s office vacancy rate at 18 percent, which is lower than neighboring Santa Clara at nearly 22 percent and Mountain View at over 30 percent. This suggests that employers are taking notice of what Sunnyvale offers and are eager to be part of a downtown environment that provides more than just office space.
The redevelopment of downtown Sunnyvale has been a long-term effort, especially after the decline and eventual demolition of the largely empty Sunnyvale Town Center mall in the mid-2000s. The transformation is being led by Cityline, a coalition of developers and investors who are reimagining the 36-acre site into a vibrant destination. The project includes nearly one million square feet of new office space, hundreds of new apartments, and modern retail options designed to attract both residents and businesses.
Community engagement has also been central to this redevelopment. Events organized at Cityline have drawn attention not only from residents but also from prospective tenants. These events help showcase the downtown as an attractive, people-centered space. Heather Gerlach, founder of MDR Consulting working with Cityline, explained that the project offers an alternative to the so-called “golden handcuffs” of traditional corporate offices. Instead of confining employees to workspaces packed with amenities but little flexibility, Sunnyvale’s downtown offers proximity to restaurants, entertainment, and community spaces, creating a more natural balance between work and leisure.
The strategy appears to be paying off as prominent companies commit to downtown Sunnyvale. Databricks, a rapidly growing artificial intelligence and data intelligence platform, is moving into a 305,000-square-foot office on Washington Avenue, with plans to occupy the space next year. Meanwhile, cyber security giant Crowdstrike, a publicly traded firm, has also chosen downtown Sunnyvale as a home for its offices. Their decisions highlight how the mix of housing, retail, and office infrastructure appeals to high-profile employers.
Developers note that the journey has not been without challenges. Leasing office space across the Bay Area has remained difficult in the aftermath of the pandemic, with many companies rethinking workplace strategies and hybrid models. John Rupert, senior director of development at Hunter Properties, said that Cityline’s confidence in its mixed-use strategy helped it endure through the tough years. He emphasized that the availability of first-class amenities and a vibrant mixed-use environment is now drawing interest from major firms, even as other Bay Area markets continue to struggle with vacancies.
Sunnyvale’s transformation serves as an example of how long-term vision, coupled with a willingness to embrace diverse development, can reshape a city’s identity. By ensuring that housing supports office development, and retail enriches the community, the city has created a downtown that works for businesses, residents, and visitors alike. The new downtown is not just about buildings, but about a cohesive urban environment that promotes connection, engagement, and economic vitality.
As Databricks and Crowdstrike prepare to join the growing list of downtown tenants, and as new apartments and retail spaces continue to open, Sunnyvale’s model is increasingly viewed as a blueprint for other Bay Area cities. While no single approach can solve the region’s housing and commercial real estate challenges, Sunnyvale’s example demonstrates that integrating growth across sectors can foster resilience, vibrancy, and prosperity. The redevelopment of its downtown is not only filling office spaces but also building a strong foundation for the city’s future.
