Google and Lendlease Group have terminated their partnership on four major mixed-use developments in the San Francisco Bay Area due to unfavorable market conditions. The decision affects projects in San Jose, Sunnyvale, and Mountain View, which were set to cover over 15 million sq ft of diverse and usable spaces.
Despite this development, Google remains steadfast in its commitment to these projects. The tech giant's Senior Director of Development, Alexa Arena, confirmed that the company plans to continue with other developers and financial backers.
The dissolution of the partnership also impacts the Downtown West neighborhood in San Jose, a significant part of Google's comprehensive real estate review. However, the company reassures its commitment to housing projects in the Bay Area. This commitment was echoed by Mayor Matt Mahan of San Jose, who highlighted Google's dedication to an 80-acre mega project in his city.
In the wake of the COVID-19 pandemic, there has been a decrease in demand for office space among tech companies. Yet, Google's Downtown West campus is anticipated to aid San Jose's economic recovery.
Google's intention to build a large mixed-use neighborhood in downtown San Jose was further reinforced by Ruth Porat, president and chief investment officer with Alphabet (NASDAQ:GOOGL), at a recent community event. The presence of Alphabet's top executive serves as a signal of the company's continued commitment.
As part of its ongoing collaboration with local governments, Google is undertaking a $750 million rezoning effort aimed at constructing at least 15,000 homes. Prior to ending their partnership, Google and Lendlease had facilitated the construction of up to 12,900 units in Mountain View and San Jose.
The planned transit village in Downtown West is expected to house up to 20,000 Google employees. It will include 7.3 million square feet of offices, 4,000 residential units, 500,000 square feet of retail space, 300 hotel rooms, and 15 acres of open space.
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