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September 21, 2017

Google grabs two Sunnyvale buildings as footprint widens

The Mercury News

George Avalos

SUNNYVALE - Google has bought two more buildings in Sunnyvale's Moffett Park district, widening its head-spinning expansion quest to acquire office and research sites in Silicon Valley, an unprecedented expansion that has dazzled experts.

Blue Angels LLC, an entity with direct ties to Google, and with offices at the tech giant's headquarters, paid $18.9 million on Sept. 14 for a low-slung industrial building at 1190 Borregas Ave. in Sunnyvale. The building totals just under 33,000 square feet and the price works out to $576 a square foot.

Google on Sept. 20 bought a 27,000-square-foot building at 270 E. Caribbean Drive, according to Santa Clara County property records. That price was even higher, $20.2 million, or $747 a square foot.

"You really don't see anybody else paying this much, except for Google," said Chad Leiker, a first vice president with Kidder Mathews, a commercial real estate brokerage.

All over Moffett Park, signs have sprouted that point to Google's expansion. Google's quest for space includes renting big office buildings as well as buying buildings, large and small, new and old in Moffett Park, much of which was built decades ago to accommodate the expansion of the aerospace, defense and tech industries.

Half a mile away, near the corner of Crossman Avenue and East Java Drive, Google is moving into a pair of striking office towers that it has leased at a 15.5-acre campus dubbed Moffett Gateway. The digital behemoth has leased the entire 613,000-square-foot complex, including two office buildings that each total 299,000 square feet.

"No one has witnessed the magnitude of growth that Google has exhibited over the last decade, not from Cisco, not from Apple," said Phil Mahoney, vice chairman with Santa Clara-based Newmark Cornish & Carey, a commercial realty brokerage.

Yet the recent purchase and the mammoth leases are far from the only expansion efforts by Google in Sunnyvale, or, for that matter, in Silicon Valley.

Through a combination of completed purchases and sales contracts to buy buildings, the value of Google's purchases in the Moffett Park area have reached the $1.1 billion mark.

In late July, Google bought approximately four-dozen buildings in Sunnyvale's Moffett Park. The buildings and properties involved in that transaction boasted a combined value of roughly $800 million.

In one of the two most recent deal, the Google connection emerged because the Blue Angels LLC entity requested that future property tax bills and the recorded deed be mailed to the real estate department at 1600 Amphitheater Parkway in Mountain View, the address of the Googleplex, a headquarters campus whose occupants are Google and its owner Alphabet. These instructions were outlined in property records on file with the Santa Clara County Recorder's Office.

Google has previously used, and is currently using, proxy companies that it or its allies control to conduct property purchases. Google has employed this type of approach, both in Sunnyvale and in downtown San Jose.

Google didn't immediately respond to multiple requests from this news organization for a comment.

Google also is actively collecting properties in an aging industrial district of downtown San Jose. Google and its development ally Trammell Crow have spent at least $141.7 million to buy buildings and land near Diridon Station for a transit-oriented development that some call a Google village.

"Google is undertaking a major assemblage of properties, something we've never seen before in Sunnyvale or downtown San Jose," Leiker said.

Potentially, 15,000 to 20,000 Google employees could work in the downtown San Jose transit village, which might consist of 8 million to 10 million square feet of offices.

"Google's headcount continues to grow; they are in multiple fields and businesses," Mahoney said.

For the full story, visit: The Mercury News

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