Australia-based contractor Lendlease announced Thursday a $15 billion deal with Google to provide master planning, entitlement and development services jointly with the internet search giant for 15 million square feet of residential, retail, hospitality and other projects in the San Francisco Bay Area. Google will develop its own office space, which is not included in the $15 billion.
Google's property is located in the Bay Area cities of San Jose, Sunnyvale and Mountain View, which is also where Google headquarters are located. Depending on how long the planning portion of the project takes, the development phase could start as early as 2021.
The value of the land, according to Google, is approximately $750 million, and the partnership with Lendlease is part of the tech company's commitment to build 20,000 new homes in Silicon Valley. The units will be built with all income levels in mind and are intended to help ease the persistent shortage of housing in the area.
Upon the Lendlease announcement, the value of the company's shares, according to Reuters, increased more than 5% to an eight-month high. The deal with Google also allows Lendlease to expand its residential development business on the heels of reported problems in its engineering division.
Google, one of the biggest tech companies in the world, also provides contractors with plenty of business through the many construction projects it finances, such as data centers and office space.
In fact, earlier this year, Google announced that it would invest $13 billion toward an expansion of its U.S. data centers. Although Google is planning projects in 24 states, the major expansions will be concentrated in 14 states, including Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina and Virginia. Google CEO Sundar Pichai said 2019 is the second year in a row that the company will grow more "outside of the Bay Area than in it."
Late last year, Google revealed its plans for a $1 billion, 1.7-million-square-foot New York City campus called Google Hudson Square. Although the project will see Google lease three existing buildings, the company plans to invest in significant capital improvements as well.
And earlier this year, Google announced its plans to lease and then convert the Westside Pavilion shopping center in Los Angeles to a 584,000-square-foot office campus called One Westside, which will be ready for Google employees in 2022. Gensler is designing the conversion, which will include LEED Silver certification; 150,000-square-foot floor plates that provide open and flexible space; 45,000 square feet of outdoor terraces and patios with folding glass walls; and rooftop space with a garden deck that connects to unchanged parts of the mall including a movie theater, tavern restaurant and retail.