Google to spend $3.5B on offices, data centers in California this year

Part of $9.5B allocation for commercial real estate across US this year

Google's Sundar Pichai and the Bay View campus (Getty, Heatherwick Studio)
Google's Sundar Pichai and the Bay View campus (Getty, Heatherwick Studio)

Google plans to spend more than $3.5 billion on offices and data centers in California this year, part of its $9.5 billion investment in such properties across the U.S.

The Mountain View-based company intends to create 12,000 new full-time jobs in the U.S. this year, executives announced today at the site of a mixed-use project already underway in Downtown San Jose.

In California, where the company has been based since its inception in 1998, it already has 13 offices and more than 54,000 full-time employees.

Google didn’t disclose how many of the new jobs would be in California.

It did provide updates on several projects in the works in the Bay Area — a slate of proposals that adds up to millions of square feet of office space and thousands of new homes in the region.

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“As we embrace our flexibility in how we work, we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees and stronger communities,” Google’s Sundar Pichai, also the CEO of parent company Alphabet, said in a statement.

The company plans to open a 1.2-million-square-foot office development in Mountain View called Bay View this year, and is wrapping up construction on a 595,000-square-foot campus nearby. Google executives expect the Mountain View City Council to vote this year on a pair of mixed-use projects that would include almost 9,000 homes and up to 2.6 million square feet of offices between them.
In Sunnyvale, about three miles away, Google is building a 1 million-square-foot campus.

Google’s plan to boost spending in its home state to $3.5 billion for the year comes the same month it began recalling some of its workers to the office, ending a voluntary work-from-home model at its Bay Area workplaces and several others around the country. The outlay it plans to make on offices and data centers in California this year is more than one-third of its total U.S. investment, underlining the state’s importance in its real estate strategy.

The company disclosed few specifics about its California investment, or how much of the $3.5 billion might be allocated to plans based on the City of San Jose’s approval for more than 7 million square feet of offices and 4,000 homes. It said that it’s “making progress” on the project with development partner Lendlease but didn’t disclose a construction timeline.

Outside of the Bay Area, a joint venture of two REITs, Hudson Pacific Properties and Macerich, are turning the former Westside Pavilion in Los Angeles into an almost 600,000-square-foot, Google-anchored office campus. The project is slated to open next year, Google’s release said. The company’s Southern California presence also includes satellite offices in Irvine and San Diego.

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