Commercial Real Estate in Santa Clara: Office/R&D Zones, Data Centers and Mixed-Use Corridors

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Santa Clara’s commercial property is dominated by office, R&D and industrial land north of the Caltrain line, much of it campus-style buildings and a growing number of data centers, with neighborhood and regional retail and new mixed-use corridors to the south. The city rewrote its zoning code into a new set of chapters, and each building type now sits in a specific zone with its own floor area and height limits. Confirm the zone and any plan area for each parcel with the City of Santa Clara Planning Division before relying on this page.

Who controls the parcel

Santa Clara is an incorporated city, so its Zoning Code (Title 18) governs land inside city limits, with separate chapters for commercial, mixed-use, office and industrial zones, planned developments, the Lawrence Station Area Plan and a Downtown Form-Based Code. Santa Clara sits next to San Jose Mineta International Airport, and several zones defer building height to Federal Aviation Administration flight-path limits instead of a fixed number, so airspace review is part of the city’s process for tall projects. Unincorporated County pockets are rare here; see our Santa Clara County commercial guide for County rules.

Santa Clara zoning for commercial, industrial and mixed use

The code itself carries a few inconsistencies, such as a 90-foot data center allowance in the LI text against a 70-foot table value, so ask Planning which figure governs a given project.

Office/R&D, industrial land and data centers

North Santa Clara’s employment land is split by intensity rather than by use. LO-RD is the landscaped campus zone; HO-RD allows the same office and R&D uses at up to twice the floor area and buildings of up to 12 stories.

• Data centers. A stand-alone data center needs a conditional use permit in all four office and industrial zones under the specific-use standards. A data center serving the main use on the site is allowed by right in LO-RD, HO-RD and LI, and in HO-RD that ancillary form is the only one allowed.
• Retail in industrial zones. In LI and HI, commercial uses that support the main business need a minor use permit, must stay inside the main building and cannot exceed 10% of floor area or 20,000 square feet, whichever is less. Wholesale building-materials businesses may use up to half the floor for display and sales.
• Offices in industrial zones. Offices are limited to 20% of a building in LI and 10% in HI, and medical offices are barred from both, which matters when an industrial building is marketed to office or clinic tenants.
• Sensitive uses and hazards. LI and HI limit nonindustrial uses that bring in sensitive receptors, hazardous materials storage facilities need a use permit in HI, and waste incineration is prohibited throughout.
• Towers. Wireless towers of 70 feet or more need a conditional use permit in these zones; shorter ones need a minor use permit.

Retail centers and mixed-use corridors

Commercial zones. In C-N, C-C and C-R, alcohol sales and service are allowed by right, while bars, nightclubs and drive-throughs need a conditional use permit. Smoke shops need a use permit in C-C and C-R and are not allowed in C-N. Hotels and motels need a use permit in all three, and the chapter separately allows hotels north of the Caltrain corridor at up to 2.0 FAR, subject to compatibility findings. Parking is not allowed in any front setback, and buildings next to R1 and R2 homes follow a 45-degree daylight plane.

Mixed use. The mixed-use zones put commercial and office space on the ground floor with housing above and require a minimum amount of commercial floor area:

• MU-NC and MU-CC: 20 to 36 units an acre, with 32-foot heights near single-family homes.
• MU-RC: regional corridors at 37 to 50 units an acre and up to 60 feet, with 75% of the facade at the setback line and ground-floor public open space.
• MU-VHD: 50 to 120 units an acre, height limited only by FAA rules; ground-floor live-work units need 12-foot ceilings and 35-foot room depth.

Plan areas. The Patrick Henry Drive area’s HD Flex zone lets four eastern parcels develop as multifamily, office or a mix at up to 160 feet. The Lawrence Station Area Plan and the Downtown Form-Based Code have their own chapters; the published downtown code is marked as an October 2023 public draft, so confirm the adopted version.

Transfer tax, business tax and property tax

Santa Clara County’s documentary transfer tax is $0.55 per $500 of value, excluding liens that remain, and it credits a conforming city tax set at half that amount. Santa Clara’s Chapter 3.35, adopted by Ordinance 1178 on December 5, 1967, sets 27.5 cents per $500 on transfers over $100 and is administered by the County Recorder. Because of that credit, the city’s share generally comes out of the County’s $0.55 rather than adding to it; confirm the total on your escrow estimate. The city’s business tax is in Chapter 3.40 and its transient occupancy tax in Chapter 3.25; we did not verify their rates. A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in Santa Clara

Start with our commercial due diligence checklist, then add:

• Confirm the zone and whether the parcel is in the Lawrence Station, Patrick Henry or downtown plan areas.
• For a data center, confirm whether it is stand-alone (conditional use permit) or ancillary, and check power availability with the city’s electric utility.
• For an industrial building, confirm the office share fits the 20% or 10% cap and that no medical tenant is planned.
• For tall projects, check FAA airspace limits near the airport flight path.
• For retail, confirm drive-through, bar or smoke shop permits before signing a lease.
• For mixed-use sites, model the minimum commercial floor area the zone requires.

Questions people ask

Sources & notes

1. Santa Clara Zoning Code (GoCodebook)
2. Chapter 18.12, Commercial Zones
3. Chapter 18.16, Office and Industrial Zones
4. Chapter 18.14, Mixed Use Zones
5. Chapter 18.10, Residential Zones (Patrick Henry districts)
6. Chapter 18.26, Downtown Form-Based Code
7. Santa Clara Chapter 3.35, Real Property Transfer Tax
8. Santa Clara County Ordinance Code, Division A30, Chapter III

Note: The code pages we read show mixed edition dates and no adopting ordinance numbers for the zoning chapters. We did not read the Lawrence Station Area Plan chapter, the full downtown code, the business tax or TOT rates. The city electric utility point is general practice, not from a code section.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

Related: Santa Clara real estate guide · Multifamily property in Santa Clara · Commercial real estate services