Google pays $1 billion for Verizon’s Sunnyvale sites
Search giant plans for multiple mixeduse neighborhoods
SUNNYVALE >> Google has paid $1 billion to grab several Sunnyvale properties that were sold by Verizon, including Yahoo’s headquarters complex, in a mega-deal completed this week, public records show.
The billion-dollar Sunnyvale transaction is believed to be the largest, ranked by dollar value, in the Bay Area this year, and the largest such property purchase in the nine-county region since a $1 billion office park purchase in Mountain View last November — also completed by Google.
The purchases all occurred in a part of northern Sunnyvale where Google has been scooping up properties in recent years that would provide enough land so the search giant can create office campuses and brand-new neighborhoods.
“Google is looking to create a series of mixed-use neighborhoods, just like they want to do in downtown San Jose,” said John Yandle, an executive vice president with Newmark Knight Frank, a commercial real estate firm.
The tech titan’s emerging strategy — throughout Silicon Valley, not just in Sunnyvale — points to a Google gambit that would enable mul
tiple South Bay neighborhoods to sprout, replete with modern office buildings, homes, shops, restaurants, and parks.
“This means Google believes in Silicon Valley,” Yandle said. “This is good for the economy overall.”
Google recently announced an agreement with a real estate ally to help the tech company realize wideranging ambitions to create several mixed-used neighborhoods — including more housing — in three Bay Area communities: downtown San Jose, Sunnyvale, and Mountain View.
Lendlease, a mixeduse urban developer, has teamed up with Google on what is expected to become a $15 billion development venture to dramatically transform large swaths of all three cities.
The properties were all owned by various affiliates of Verizon or its subsidiary, Internet portal Yahoo, according to documents that were filed on July 23 with the Santa Clara County Recorder’s Office.
The property purchase was accomplished through two transactions and brought about Google’s purchase of properties with nine different addresses in Sunnyvale. The properties are on First Avenue, Java Drive, Bordeaux Drive, and North Mathilda Avenue. Google bought several buildings and a big chunk of empty land.
Google confirmed the completion of the property purchases but didn’t want to discuss the situation at length.
CBRE, a commercial real estate firm, helped to arrange the mammoth deals, which appear to be the largest so far this year in the Bay Area and possibly the United States. CBRE didn’t comment about the situation.
The property deals come on the heels of Verizon’s announcement that it had signed a big lease in San Jose’s Coleman Highline office complex.
In downtown San Jose, near the Diridon train station, Google has proposed a transit-oriented village of office buildings, homes, shops, restaurants, and parks where 25,000 people could work, including 15,000 to 20,000 of the search giant’s employees.
Verizon Media leased
640,000 square feet in the successful mixed-use campus near San Jose International Airport and said it would shift 3,400 workers to San Jose, including 2,400 from Sunnyvale.
Google is on a jaw-dropping shopping spree for properties in Silicon Valley and has completed some purchases of staggering size within the last year.
It was only last November that Google completed a $1 billion purchase of a big Mountain View office and research park. That headspinning deal ultimately became the biggest property purchase in the Bay Area, and the second-largest in the nation — No. 2 after Google’s acquisition of the iconic Chelsea Market office complex in Manhattan for $2 billion.
Over a stretch that began in mid-2017 until just prior to this most recent deal, Google had spent at least $1.4 billion buying numerous properties in northern Sunnyvale alone.
The most recent deal with Verizon puts the value of Google’s bulging shopping cart in at a stunning new pinnacle of $2.4 billion — just in that part of Sunnyvale. Google has bought more than 50 parcels in northern Sunnyvale in two years.
Besides Sunnyvale, Google has also been collecting properties in Redwood City, Palo Alto, Mountain View, north San Jose, and downtown San Jose.
“When you get as big as Google, you want to be able to attract employees from all parts of the Bay Area,” Yandle said. “You need a southern location, a northern location, a location like they have in downtown San Jose. That’s why they are doing this. Google’s business model is not going away.”
Google’s business operations are so complex and diversified that the tech titan is one of the few companies that could engineer this sort of a buying binge.
“It’s been a long time since we have had big shopping sprees like this,” said Dave Sandlin, an executive vice president with Colliers International, a commercial real estate firm. “With Google, a lot of these deals could be for a specific division or a company within Google. Google has so many operations with good profits that a lot of them are expanding.”