Smith Development Plans 60,000-Square-Foot Office Project in Palo Alto

• Smith Development is planning a roughly 60,000-square-foot office project at 2525 Park Boulevard, Palo Alto, California, near Caltrain and the California Avenue corridor.
• The development will include approximately 4,000 square feet of retail space, likely including a cafe, along with outdoor workspaces and patio areas.
• Boyd Smith, owner of Smith Development, said the company is confident in the California Avenue office market despite broader post-pandemic uncertainty.
• The project is expected to open in late 2028, with leasing anticipated to begin six to 12 months after construction starts.
• Palo Alto's average office asking rent reached $8.47 per square foot in the second quarter of 2026, compared with $5.22 per square foot across Silicon Valley.

What Smith Development Is Planning for Park Boulevard

Palo Alto-based Smith Development is moving forward with plans for a new office development at 2525 Park Boulevard, marking one of the relatively few new office projects to emerge in Silicon Valley since the pandemic. The project is planned to include approximately 60,000 square feet of office space across multiple parcels that previously housed research and development and office uses. The site is positioned near a Caltrain station and the California Avenue retail and restaurant corridor, giving the planned development access to transit as well as established neighborhood amenities.

 

 

What the Park Boulevard Project Will Include

In addition to the office component, the development is expected to include approximately 4,000 square feet of retail space. The retail portion will likely include a cafe, while outdoor workspaces and patio areas are planned to give office users additional areas for working and gathering. The combination of office, retail and outdoor space reflects the project's location within the California Avenue business district, where pedestrian activity and transit access are important components of the local commercial environment.

What the Developer Says About the Office Market

Boyd Smith, owner of Smith Development, said the company is comfortable moving ahead with new office construction despite the uncertainty surrounding the sector after the pandemic.

“Coming out of Covid and then going right into this remote work environment, everybody was scared to death to build a new office because you have no idea what the future is going to look like,” Smith said.

He added that the local market has strengthened, saying, “I’m not sure there’s a more active office market in the Bay Area right now than the [California Avenue] market, so we’re super confident and comfortable moving forward.”

What the Silicon Valley Office Pipeline Looks Like

The Park Boulevard project comes as new office construction across Silicon Valley remains well below historical levels. The region added an average of approximately 2.5 million square feet of office space annually between 2016 and 2021. That pace dropped to about 740,000 square feet per year between 2022 and 2025 as higher interest rates, construction costs and uncertainty around workplace demand made developers more cautious. Smith said lenders have also become more comfortable financing office projects again. The developer remains in discussions with multiple lenders regarding financing for Park Boulevard.

What Office Rents Look Like in Palo Alto

Palo Alto continues to command some of the highest office rents in Silicon Valley. According to Cushman & Wakefield's second-quarter 2026 market report, average asking rent in Palo Alto reached $8.47 per square foot. That compares with an average asking rent of $5.22 per square foot across the broader Silicon Valley market. The rental-rate difference provides a key factor behind Smith Development's decision to pursue new office space in the California Avenue area despite the limited volume of new office construction across the region.

What Comes Next for 2525 Park Boulevard

The total development cost has not been disclosed, and Smith Development is still working to secure project financing. Construction is expected to lead to an opening in late 2028. Leasing is planned to begin approximately six to 12 months after construction starts. If completed as planned, the project will add approximately 60,000 square feet of new office space and 4,000 square feet of retail to Palo Alto's California Avenue corridor, expanding the city's limited pipeline of new office development.