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Saturday, April 20 2024
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Google ends $15 bn deal with lead developer for US campuses projects

Google ends $15 bn deal with lead developer for US campuses projects
Photo Credit : IANS

San Francisco: Google has ended its $15 billion deal agreement with Lendlease, the developer the company had been working with on major campus projects in the Silicon Valley.

Lendlease said in a statement that both companies agreed to end the deal after determining that “the existing agreements are no longer mutually beneficial given current market conditions.”

The four master-planned districts are in San Jose (Downtown West), Sunnyvale (Moffett Park), and Mountain View (Middlefield Park and North Bayshore) in the San Francisco Bay area in California, collectively referred to as the San Francisco Bay Project.

The development could have totalled over 15 million square feet of “office, residential, retail and other space.”

Google and Lendlease agreed to the original $15 billion deal in 2019 and planned to spend 10 to 15 years redeveloping Google’s land across locations.

However, the pandemic significantly changed business real estate needs after companies shifted toward hybrid work. Google’s senior director of development Alexa Arena said that the company is looking at “a variety of options” to meet its housing commitment.

“We’ve been optimising our real estate investments in the Bay Area, and part of that work is looking at a variety of options to move our development projects forward and deliver on our housing commitment. We appreciate Lendlease and the work the team has done to get us to this point,” Arena added.

As part of the decision to end these agreements, Lendlease will receive a payment in consideration for value created through the entitlement and master planning process. Lendlease will remove the San Francisco Bay Project, which was expected to commence construction in FY26, from its development pipeline.

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