Google buys downtown publicstorage complex

Acting through an affiliate, tech firm and Trammell Crow pay $32 million for site

Google and its development ally on Thursday bought a large public storage complex in downtown San Jose, marking one of the search giant’s most expensive purchases yet for its transit- oriented village.

Acting through an affiliate, TC Agoge Associates, Google and realty developer Trammell Crow bought the Storage Solutions San Jose complex at 570 Cinnabar St. Thursday. The site bumps up against train tracks that lead into the nearby Diridon transit station.

TC Agoge paid $32 million in cash for the publ ic storage complex, Santa Clara County property records show. The 105,000-square-foot building sits on 2.7 acres.

“The deal velocity and the amount of properties they are buying suggests that the Google development is a matter of when and not if,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use and planning consultancy. “Google knows it has a partner in the city that is willing to have downtown San Jose transformedby this development.”

Only a $55 million purchase of an old Pacific Bell building on South Montgomery Street and a $51.5 million acquisition of an industrial site on Cinnabar topped the properties

that Google and Trammell Crow have bought for the downtown San Jose venture.

“This deal shows that perhaps Google is feeling bullish with how the negotiations with the city are going,” Staedler said.

On Monday, the San Jose City Council unanimously approved a pricing agreement to sell an array of government- owned properties to Google that would be key pieces of the tech titan’s proposed community of offices and amenities in downtown San Jose. The total price for the combined property sales to Google is $67 million for nine parcels at six addresses downtown.

The purchase of the public storage site appears to have bestowed a big profit on the prior owners. Bought in 2014 by Storage Solutions, the site in 2017 had an assessed value of $13.9 million, county assessment documents show.

Mountain View-based Google and San Franciscobased Trammell Crow have spent at least $182.1 million purchasing industrial, retail, residential and vacant lots that would form a large chunk of the village that Google envisions for the western edges of downtown San Jose.

Google says it wants to develop 6 million to 8 million square feet of offices near Diridon Station and the SAP Center entertainment complex, enough space to accommodate 15,000 to 20,000 employees of the tech titan.

The purchase of the public storage complex, combined with a prior acquisition of a big Pitco Foods site across the street, means the current north boundary of Google’s areas of interest for the village project is adjacent to a big retailmall known as San Jose Market Center.

“This new purchase is a key piece in developing the northwest corner of downtown San Jose,” said Scott Knies, executive director of the San Jose Downtown Association. “It connects the downtown to Market Center, and to (Interstate) 880.”

The anchors of the busy center include Target and Trader Joe’s.

“If I were Target, I would hang a big banner saying, ‘Google welcome,’ on the side of the store,” Staedler said.