SAN JOSE -- Fast-growing software company Xactly has decided to expand in downtown San Jose, which is seeing an upswing in activity, executives and municipal officials said Friday.
Xactly leased 60,000 square feet in the River Park 2 office tower, which potentially means hundreds of new tech jobs in the city's central business district.
"We are excited to be downtown," said Christopher Cabrera, co-founder and chief executive with San Jose-based Xactly. "This is at least equal to the largest lease deals in downtown San Jose in the last few years. We have doubled down on our commitment to downtown San Jose."
Xactly currently has about 320 employees at its San Jose headquarters, at West Santa Clara Street and Notre Dame Avenue. There, it occupies about 28,000 square feet, which means the new lease would double the tech firm's footprint downtown.
"It is another validation of the comeback of downtown San Jose," said Phil Mahoney, an executive vice president with Cornish & Carey Commercial, a realty brokerage that helped arrange the Xactly lease.
About 90 tech companies are now in downtown San Jose, said Nanci Klein, the city's deputy economic development director. The city's tech talent pool, she added, includes more than 100,000 residents with engineering or related degrees.
"By locating in downtown San Jose, we can have employees get to us from San Francisco by using Caltrain, which isn't a bad commute in that direction," Cabrera said. "We also pull from South San Jose and from the East Bay. It really helps with recruitment."
Xactly is in a hiring mode and added 75 workers in the first half of this year, Cabrera said. While the company didn't specify how many people will eventually work in the building, a doubling of its office space could mean another 200 to 300 employees over time.
The tech firm offers cloud-based software as a service that helps companies precisely determine what sorts of incentives and compensation they should provide to their employees. Twitter, Salesforce, Coca Cola and SAP are among its 700 customers.
This lease and others that realty insiders say are in the works signal a welcomed boost to San Jose's downtown district, which has struggled with high vacancies. The current office vacancy rate in downtown San Jose is 18.3 percent, according to information supplied by commercial realty firm Colliers International. That's a marked improvement from the year-before vacancy of 24.1 percent.
"We hope our expansion sends the message to Silicon Valley that San Jose is the real deal," Cabrera said. "The downtown is chock-a-block full of restaurants, entertainment and culture. There is so much going on downtown. The employees love being here."