Google’s Next Venture Could Have Tremendous Impact on San Jose Real EstateColin Wiel
June 12, 2017
Google is notoriously tight-lipped about its expansion plans, which is why it came as such a surprise this Thursday when the tech company confirmed it has been eyeing San Jose’s Diridon Station district as a possible location for new corporate offices.
But even more surprising is the fact that these won’t be any average Google offices. No. Instead, the company has ambitious plans to build a 6 million sq. ft. campus that could accommodate upwards of 20,000 new jobs. When fully built out, this would be the largest Google office complex in the world—twice the size of its “Googleplex” corporate headquarters in Mountain View.
“We’re excited to have the support of the San Jose city council as we evaluate our options at Diridon Station,” a Google spokesperson said yesterday.
San Jose Mayor Sam Liccardo admitted that his office had been courting Google for years. The city realized there was a tremendous opportunity to add new mixed-use, transit-oriented development around the BART station.
Apparently, after further consideration, Google agrees.
While the plans are not set in stone, the city has offered to roll out the red carpet to make the deal happen. This includes selling land owned by the city in order to assist Google with the assembly of the entire 240-acre area that would be needed to build the mega-campus (which the city notes would be sold at fair market value, ensuring residents that there would be no “sweetheart deal” given to the tech titan at the expense of local taxpayers).
San Jose property managers and apartment owners are already on notice. If Google’s transit-oriented tech village becomes a reality, this would have a tremendous impact on San Jose’s real estate market.
To put the scale of this development in perspective, San Jose currently has only 10 million sq. ft. of office space. Adding another 6 million sq. ft. would be transformative for the city’s economy.
And it will bring San Jose’s already strong housing market to new heights. The tens of thousands of people who work at Google’s San Jose offices will need somewhere to live. The promise of Google’s high-paying jobs is sure to spark new residential development.
“I wouldn’t be surprised to see speculative real estate developers gobbling up San Jose rental property before the details have even been finalized with Google,” says Mynd co-founder Doug Brien. “Investors will be eager to scoop up San Jose rental property before they get priced out.”
Investors who break into the market now, or San Jose property managers and landlords who already own local real estate, will benefit from elevated rents in the short-term as supply rushes to keep up with demand. “Since it is notoriously difficult to build in the Bay Area, it could take years for these new rental units to materialize,” Brien explains.
Many San Jose officials have called the proposed campus “transformational” for the Diridon district. That’s true. But it will also be transformational for the city’s housing market — for renters, San Jose, CA property managers, apartment owners and investors alike. We’ll continue to monitor the development as new details become available.