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March 25, 2016

Fremont still likely to be the 'Center of the Universe' even after Google goes

Puget Sound Business Journal

Marc Stiles

Not to jinx it, but shop owners in Fremont probably need not fret about Google leaving the Seattle neighborhood. Not with another growing tech company, Tableau Software, headquartered there.

Out of the blue on Thursday, Google (GOOG) announced it is moving from the north end of Seattle's Lake Union to the south end, where it will occupy four new office buildings. The company would not say how much office space it has in Fremont. But people in the real estate industry put it at around 200,000 square feet, or a third of Google will have in South Lake Union.

Now the question is what will happen to Google's Fremont location. "Everyone is asking that," said real estate broker Laura Ford of Colliers International (NASDAQ: CIGI).

The company could keep the space and operate on both ends of Lake Union, or give it up when the leases expires in 2020. Based on what a company representative said, the plan is to move entirely.

"We've loved being in the Fremont neighborhood but will need a bit more breathing room," Google Seattle Site Lead Clyde McQueen said in a news release announcing the move. But a lot could happen in three years when Google's new buildings are scheduled to be done.

The logical new occupant for the Fremont space is Tableau (NYSE: DATA). The company in recent months leased all of two new office buildings in and around Fremont.

Google and Tableau both declined to comment about their plans for Fremont.

Google recently doubled the size of its Kirkland campus to 375,000 square feet. Perhaps this kind of growth will continue and the company will need both the South Lake Union and Fremont offices, though real estate broker Jeff Huntington of Kidder Mathews thinks that's unlikely. Separating employees on two campuses is inefficient.

While Tableau seems a likely candidate to take Google's Fremont space, the question is does Tableau really need another 200,000 square feet. It recently leased a total of 320,000 square feet in the new buildings, which are scheduled to open over the next two years.

That would be good news for other growing companies in Fremont or those wanting to move to the quirky neighborhood that brands itself as the Center of the Universe. Google leaving and Tableau not expand more, opens the submarket to firms that currently "are boxed out," Huntington said.

The wild card is fast-growing Tableau. After the Google announcement, a Tableau spokesman said the company had "nothing new to announce at this time."

For the full story, go to Puget Sound Business Journal.

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