Google Buys Again in Mountain View

Submitted October 18, 2011, 1:09 PM

Sharon Simonson

In a long-anticipated property exchange, Google Inc. has acquired The Landmark at Shoreline for $100 million.

The 240,000 square-foot office campus on 18 acres in the city of Mountain View is adjacent to the company’s headquarters at 1600 Amphitheatre Parkway and fronts HIghway 101. The property is 90 percent occupied, but existing tenants’ leases are short-term and will expire over the next two or three years. The seller was Broadreach Capital Partners, which is headquartered in Palo Alto.

The transaction marks the latest property acquisition by Google in the North Bayshore area of Mountain View, which is east of Highway 101 and next to the San Francisco Bay. The company, which was incorporated in California in September 1998, has been on a property acquisition spree as its head-count has grown. It now owns approximately 2.6 million square feet of offices in Mountain View and seven acres of developable land, according to its most recent annual report. It also leases additional square footage in the Shoreline-North Bayshore area.

Broadreach, which was founded in 2002 by the former executive team of Spieker Properties Inc., has had economic control of the Landmark complex since October 2007. It paid $80 million and has made modest investments in its improvement. The negotiations with Google have been ongoing in fits and starts over the last several months, according to a source with direct knowledge of the transaction.

“It seems to me that it is a win-win. It is good for Broadreach and its investors, and it is good for Google because they have secured a large complex across from their headquarters,” said David Hiebert, an executive vice president and managing director for Cassidy Turley BT Commercial. Hiebert sold the property to Broadreach in 2007 and has been a listing broker since.

Mountain View has become an extremely sought-after location for companies seeking an attractive headquarters address, with Shoreline emerging as a favorite for larger companies that need greater amounts of space, Hiebert said. Besides Google, Microsoft Corp., LinkedIn Corp. and Intuit Inc. are located in the Shoreline area.

The city of roughly 75,000 people benefits from its central Silicon Valley and Bay Area location and strong transportation network, which links it well to San Francisco, the East Bay and locations to its south, Hiebert said. Those connections are strong aids in employee recruitment and retention. The city also has done a commendable job over the last decade revitalizing its downtown.

Besides those attributes, Mountain View is close to the executive housing in places such as Los Altos Hills and Atherton and benefits from proximity to Palo Alto, Stanford University and the venture capital community on Sand Hill Road.

“Momentum works,” Hiebert said. “When you have companies like Microsoft, Google and Intuit in a given location, other companies want to be in the same area, as well.”

While Google is generally secretive about its real estate and development plans, it has been clear about its desire to see the Shoreline area transform from an area that is largely made up of offices and research and development buildings to a more mixed-use. Speaking at a recent meeting of the Northern California Chapter of CoreNet Global, Google’s director of design and construction told attendees that the company is intent on transforming the Shoreline area. CoreNet is a professional organization for corporate real estate and workplace executives.

“We have bought a bunch of buildings in North Bayshore, and we have come to believe that we could take North Bayshore and make it a community versus a collection of offices,” said John Igoe. Google would like to see as many as 1,500 housing units in the area and is seeking to create “a 24/7 environment to enhance employees’ lives,” he said.

Those hopes have been integrated into the city’s and community’s thinking in its updated, master land-use plan, a proposed version of which is expected to be released Nov. 29, said Martin Alkire, a principal planner for the city. An environmental impact report on the general plan will accompany its release.

That EIR contemplates the addition of 1,500 housing units to the Shoreline area as the preferred alternative for the district, Alkire said. The proposed general plan also incorporates higher density office development and a commercial and residential center, possibly including a hotel, on approximately 20 acres close to Highway 101 and near the Computer History Museum.

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