Google’s Silicon Valley expansion now includes buying buildings House for Rent Real Estate Today

Google’s Silicon Valley expansion now includes buying buildings

August 27th, 2011 | by Savannah Fuhrman | property purchases, building leases, and development and construction proposals — the company is planning to add 3.5 million square feet to the 4.3 million square feet that Google currently occupies in Mountain View. The realty strategy is long term and will play out over several years.

Were Google to fill all of these spaces today in a hypothetical expansion, the buildings could potentially accommodate more than 11,000 employees in the South Bay. At present, Google has 29,000 employees, worldwide.

“The ‘pie in the sky’ objective for Google is probably bigger than we can even imagine,” said Chad Leiker, a vice president with Kidder Matthews, a commercial realty brokerage.

“We have a multipronged real estate strategy that includes developments like the NASA Ames campus, new off-site leases, and the development of properties in the North Bayshore area,” said David Radcliffe, a vice president of real estate and workplace services for Google.

Google emphasized it’s unlikely to move into existing properties right away. For example, Google won’t occupy the Sunnyvale buildings until sometime in 2013, after existing tenant leases expire. And the NASA project will take years to complete.

“We’re pursuing all of these projects to give us the flexibility needed to handle future growth according to business need,” Radcliffe said.

Some Google property deals have gone far afield from Silicon Valley.

In Manhattan, Google spent $1.8 billion last December for a 15-story building that occupies an entire city block, the biggest transaction of 2010 involving a single U.S. building, reported Real Capital Analytics. In Ireland, Google this year spent $140 million to buy Dublin’s tallest commercial block.

Yet even what Google has obtained in Silicon Valley through leases or property purchases might be only the tip of the iceberg.

Many buildings that Google bought this year are in areas that Mountain View has under review for allowing greater building densities.

What Google really wants is the land beneath the buildings, local experts say.

“Over the long term, those buildings will be developed into something much more than they are today,” said Michael Saign, a vice president with Cornish & Carey Commercial, a realty brokerage. “Many will be torn down.”

Most of Google’s current hiring, analysts say, is coming in a few key areas. These include display advertising sales, local commerce sales such as its Google Offers discount coupon service, mobile technologies like the company’s Android software, and the Google+ social network.

Previously, Google predicted 2011 would be its biggest year for hiring, with plans to add 6,000 workers. Halfway through 2011, Google had added 4,400 employees.

From Google’s earliest days, co-founders Larry Page and Sergey Brin have always believed their company was destined to evolve into a big and influential company, said Steven Levy, whose recent book “In the Plex” documents Google’s technology, culture and history.

“A lot of people have grandiose visions,” Levy said of Brin and Page. “Theirs turned out to be accurate.”

Mountain View officials see Google’s hectic activity as a great sign.

“It’s exciting that the company continues to be interested in Mountain View,” said Ellis Berns, the city’s economic development manager. “It’s great that Google is looking at growing and staying here, at the unique opportunities here.”

Number of Google buildings in Mountain View

$115 million

Estimated amount spent to purchase Mountain View properties

715,000

Square footage of Google propertyin Sunnyvale

11,500

The number of workers Google could employ on its South Bay properties

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