SUNNYVALE -- Google has agreed to pay $250 million to buy several Sunnyvale buildings where it could employ thousands of workers, which experts said Wednesday represents a fresh addition to the search giant's remarkable expansion in Silicon Valley.
The seller of the eight buildings is NetApp, which will become a tenant in portions of the property being acquired by Google, documents filed with the Securities and Exchange Commission show.
Mountain View-based Google bought eight buildings totaling 569,000 square feet, according to the filing. Potentially, 3,000 Google employees could work in the eight buildings.
Google has been on an expansion spree in the Bay Area, well beyond its headquarters in the GooglePlex in northern Mountain View. Industry watchers believe the expansion efforts by Google as well as other big players such as Apple and Facebook are justified, considering their skyrocketing revenue and profit trajectories.
"There are concerns about unicorns and tech startups, and those concerns are justified, but with Google and Apple, you are not talking unicorns," said Duffy D'Angelo, an executive vice president with commercial realty firm Colliers International. "It's hard to judge the capacity of what these companies ultimately need for space."
Google has been leasing and buying properties in an array of Silicon Valley locations in Mountain View and other cities. Sunnyvale is one of the high-priority expansion zones for Google, which has leased numerous properties there. That includes 1.9 million square feet in a single rental deal in Sunnyvale in late 2014 that at the time was believed to be the largest office lease in California in 15 years.
"This is a lot of space they are taking in Sunnyvale, and Google's goal appears to be to acquire as much as they can in this area," said David Vanoncini, managing partner with the San Jose office of commercial realty firm Kidder Mathews.
In the most recent deal, Google and NetApp agreed to structure the transaction as a sale and lease-back arrangement. The sale is expected to close by April 22, according to the filing.
Google's expansion efforts include proposals to develop big chunks of land at the NASA Ames Research Center in Mountain View, as well as a new office complex in Mountain View near its headquarters; property purchases in Palo Alto; the acquisition of much of a major office park in Redwood City; and a hunt for large office spaces in North San Jose.
In addition, Google has bought a building and leased another in high-profile sections of San Francisco.
"Google's expansion is not stopping any time soon," Vanoncini said. "And you also have Apple which is still active. Apple is looking at all sorts of stuff."
The expansions in Silicon Valley by an array of tech firms, large, medium and small, indicate that the region remains the top dog for high tech, despite being chased by upstart regions such as Texas and North Carolina that offer lower business and living costs.
"Silicon Valley is a lot more competitive and stronger than some people think it is," D'Angelo said. "Major companies continue to expand here."
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.