Google is facing construction delays on its buildout of One Westside — a 584,000-square-foot building owned by Hudson Pacific Properties and Macerich — and has pushed its move-in date to next year.
The company initially planned to move in this year, according to people familiar with the matter.
It’s been three years since Google announced it would sign a 14-year lease for the entirety of the former shopping mall at 10800 Pico Boulevard in Sawtelle, which Hudson Pacific and Macerich subsequently redeveloped into office space.
Google started its tenant improvement work on the property in December, according to records filed with L.A. County—a month after Hudson Pacific and Macerich finished exterior renovations and redevelopment.
The Mountain View-based company is now planning to move into the office building in 2023, a company spokesperson told TRD, adding it does not have a more specific time frame.
Hudson Pacific expects Google to occupy the space in the second quarter of 2023, according to a July financial filing. Neither the company, nor Macerich, responded to requests for comment.
Google is already paying rent at the property, according to Hudson Pacific’s financial filings. Hudson Pacific reported $28.3 million in additional revenue from January to June of this year as a result of their agreement with Google and the acquisition of a roughly 200,000-square-foot property in Seattle last December. The disclosure didn’t break down the payments from the two properties.
Construction costs across both L.A. and San Francisco have jumped 21 percent from January of 2021 to September of this month, according to a state building cost index that reports price trends for trade labor and materials. A Google spokesperson declined to comment on whether increased construction costs were causing the delays, simply stating construction was still “ongoing.”
Labor is also more expensive: compensation for all private industry workers in L.A. jumped 4.5 percent year-over-year in June, according to the U.S. Bureau of Labor Statistics.
As labor and material costs continue to rise, construction costs are expected to see a 14 percent year-over-year jump by the end of the year, according to a July report from CBRE. Material costs are expected to dip to more standard levels by mid-2023, the report added.
Google has been one the few tech companies to double down on office space across the country during the pandemic, as others are whittling down their physical presences.
Last year, the firm spent $2.1 billion on the St. John’s Terminal office building at 550 Washington Street in New York City.
In Chicago, the company is buying a 1.2 million-square-foot office building in the Central Loop from Mike Reschke for $105 million, which it plans to move into by 2026.
One Westside is set to serve as an additional office hub for Google in Los Angeles, pushing its overall footprint to more than 1 million square feet across West L.A. Right now, the company is spread across buildings in Playa Vista and Santa Monica.
In Playa Vista, Google built out a 450,000-square-foot office at an historic airplane hangar and recently added 53,000 square feet to The Bluffs office campus across the street. Google subsidiary YouTube also occupies a building next door.
Google also leases about 100,000 square feet at 340 Main Street in Venice — a property it has occupied since 2011.