Google Continues Buying Spree with $1B Purchase
- Nov 30, 2018
Nine months after making a record-breaking $2.4 billion deal for the Chelsea Market complex in Manhattan, Google has made another historic purchase―this one closer to home. The search engine giant paid $1 billion to HCP Inc. for a 51.8-acre office park it has been leasing for several years near its Mountain View, Calif., headquarters known as the Googleplex.
Google is the principal tenant of Shoreline Technology Park, which has 12 mostly one- and two-story buildings on the campus totaling 795,663 square feet. The only other occupant of the office complex at Stierlin Court 2011-2091 is Alexza Pharmaceuticals, which leases its space from Google. The company owns another property across the street where it is building a “dome” campus with canopies or tents. There are no plans to move employees or redevelop the offices. Officials at Google have said the company prefers to own rather than lease space. The Mercury News first reported the blockbuster sale.
HCP, an Irvine, Calif.-based REIT that invests in healthcare real estate including life science, medical office and senior housing properties, had owned Shoreline Technology Park since 2008. In 2011, it became the headquarters for LinkedIn, which left the site in 2016 when the two tech companies agreed to a major land swap to ease each other’s development plans in the space-constrained Silicon Valley. HCP noted in a recent SEC filing that it realized a $700 million gain from the property sale.
Even by Silicon Valley standards, the purchase price was startling―working out to a whopping $19 million per acre. It eclipses the Bay Area’s largest real estate transaction for 2018, a $284 million acquisition of the Cityview Plaza mixed-use complex in San Jose by developer Jay Paul for $284 million in July.
It’s quite a bit less, though, than the March acquisition of the 1.2 million-square-foot Chelsea Market complex in Manhattan from Jamestown for $2.4 billion, which is the largest property purchase in the United States so far this year. Located at 75 Ninth Ave., the complex occupies the full block between Ninth and 10th avenues and West 15th and 16th streets in the West Chelsea section of Lower Manhattan. In addition to Google, which had previously leased about 400,000 square feet, other tenants include the Food Network, Oxygen and Major League Baseball. A food hall is located on the lower level.
Back at its Silicon Valley home base, the internet giant has been on a buying spree for the past two years, spending close to $3 billion on properties in Mountain View, Sunnyvale, downtown San Jose and north San Jose. It also continues to lease space in Silicon Valley, including a 245,738-square-foot build-to-suit office development in Mountain View being built by Broadreach Capital Partners. In June, HFF arranged a $150 million fixed-rate loan through the New York State Teachers Retirement System to erect the six-story, Class A, LEED Platinum building that will be fully occupied by Google.
Image courtesy of Google