Over-bidding hits crazy high in red-hot Sunnyvale
The tech giant has arranged to buy three NetApp buildings for a total of $318.7 million
SUNNYVALE >> Google has struck a nearly $319 million deal to buy more properties in Sunnyvale, this time from NetApp, in a transaction that will propel the search giant’s buying binge in the area past the $1 billion mark.
And Google’s shopping spree will likely expand, brokers said Tuesday.
The tech titan has arranged to buy three Sunnyvale buildings totaling about 381,000 square feet, according to a Securities and Exchange Commission filing from NetApp.
Combined, Google intends to pay $318.7 million for the NetApp buildings. These purchases come on the heels of Google purchases of about 45 Sunnyvale properties in July that together were valued at $800 million.
The acquisitions consist of a 127,000-square-foot building at 495 E. Java Drive, a 133,000-square-foot building at 475 E. Java Drive and a 121,000-square-foot building at 1330 Geneva Drive, the SEC documents stated.
Google appears to be pushing forward at a brisk pace in its quest to occupy additional buildings. It will rent one of the buildings for an unspecified period before NetApp is obliged to depart from the property.
“Seller (NetApp), as tenant, will
lease back from the buyer (Google), as landlord, one of the buildings for a limited term,” according to the SEC filing.
Mountain View-based Google and NetApp entered into a sales contract on Sept. 11, the SEC documents said.
The sales are slated to close in two stages. By no later than Jan. 21, 2018, $223.1 million of the purchase will be due and payable. By Oct. 31, 2018, $95.6 million will be payable.
“The closings are subject to due diligence, certain termination rights and customary closing conditions, including, in the case of the second closing, local governmental approval of the subdivision of a common lot,” the SEC filing stated.
It also seems likely that Google’s areas of interest in Sunnyvale’s Moffett Park, where its purchasing activity in that South Bay city is focused, would widen.
“Yes, I would think that Google would be interested in other properties in that area,” said David Vanoncini, a senior vice president and managing partner with Kidder Mathews, a commercial realty brokerage.
Google also has been busy in downtown San Jose. Working with a development partner, Trammell Crow, Google has been purchasing an array of aging properties near the Diridon train station and the SAP entertainment complex.
The downtown San Jose properties are being collected so Google can build a transit-oriented village totaling 8 million to 10 million square feet, where 15,000 to 20,000 Google employees would work.
Google and Trammell Crow have spent at least $141.7 million to buy properties near Diridon station for the village project.
Google also is negotiating with San Jose city officials for the purchase of 16 government-owned parcels that would be part of the future campus.
In the most recent Sunnyvale deals, Google bought three buildings that are adjacent to each other and near the corner of East Java and Geneva drives.
But that doesn’t mean the digital giant will always seek adjacent properties.
“Google wants more than parcels that are contiguous,” Vanoncini said. “Google just wants to control that entire area of Sunnyvale.”
Vanoncini said Google has approached multiple Sunnyvale property owners with an interest in obtaining their properties. But all of this activity in Sunnyvale is just one facet of the company’s areas sought for expansion.
“Google will expand in the North Shoreline area of Mountain View, in Sunnyvale and in downtown San Jose,” Vanoncini said. “These are all areas that Google sees as part of their strategic interests.”