Google ends $15 billion deal with Lendlease on Silicon Valley projects
Google has terminated its $15 billion deal with Lendlease, the developer the company had been collaborating with on major campus projects in the Silicon Valley. The decision was made due to the understanding that the existing agreements were no longer mutually beneficial considering the current market conditions, according to a statement released by Lendlease.
The San Francisco Bay Project
The joint venture between Google and Lendlease was focused on developing four master-planned districts in the San Francisco Bay area in California. The districts, collectively referred to as the San Francisco Bay Project, were located in San Jose (Downtown West), Sunnyvale (Moffett Park), and Mountain View (Middlefield Park and North Bayshore). The project had the potential to encompass over 15 million square feet of office, residential, retail, and other space.
Changing real estate needs
The COVID-19 pandemic significantly altered the landscape of business real estate needs, particularly as companies shifted towards hybrid work models. This shift prompted Google to reassess its plans. Alexa Arena, Google’s senior director of development, stated that the company is exploring various options to fulfill its housing commitment.
“We’ve been optimizing 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,” said Arena.
Termination agreement
As part of the decision to terminate the agreements, Lendlease will receive compensation for the value created through the entitlement and master planning process. Additionally, Lendlease will remove the San Francisco Bay Project, originally scheduled to begin construction in FY26, from its development pipeline.
In conclusion, Google has ended its partnership with Lendlease on the $15 billion Silicon Valley projects. The decision was made due to changing market conditions and the need to reassess real estate investments in light of the pandemic. Google is now exploring alternative options to meet its housing commitment.
- Google terminates $15 billion deal with Lendlease on Silicon Valley projects
- Existing agreements no longer mutually beneficial given current market conditions
- Four master-planned districts in San Francisco Bay area affected
- Projects could have encompassed over 15 million square feet of space
- Pandemic led to reassessment of real estate needs
- Google exploring various options to meet housing commitment
- Lendlease to receive compensation for value created through planning process
- San Francisco Bay Project removed from Lendlease’s development pipeline
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