Google expands in San Jose amid real estate reassessment, despite cutback in other areas

Google expands in San Jose amid real estate reassessment, despite cutback in other areasSource: 175 W Tasman Drive (Artist's Rendering of Google Sign on Google Maps)
Tony Ng
Published on May 16, 2023

As Google expands further into the San Jose area and establishes its Tasman Campus, the tech giant's commitment to assessing real estate footprint and the impact of its expansion on both the local economy and its workforce remain a hot topic. The Mercury News reported that Google has already begun use of three of the four buildings on their new Tasman Campus. In April, Google confirmed it had moved into two large office buildings on Brokaw Road between North First Street and Bering Drive, part of a four-building lease spanning 729,000 square feet. The company's recent purchase of another campus from Cisco Systems for $164.2 million further solidifies its growing presence in North San Jose, even as the timeline for their massive Downtown West mixed-use neighborhood development remains uncertain.

At the same time, Google announced a $500 million allocation to reassess its global real estate footprint during its first-quarter 2023 earnings call as reported by SFGate. Many of these lease terminations are expected to take place in the Bay Area, though Google spokesperson Ryan Lamont reassured that the company's campuses will remain a "cornerstone of our culture" as it seeks to efficiently invest in real estate that matches its hybrid workforce's needs. The anticipated groundbreaking for Google's planned San Jose village, which includes over 4,000 housing units and several million square feet of office space, is still expected to occur by the end of 2023 despite this real estate reassessment.

Rendering of "The Gateway" - via Google's Website

In the midst of Google's real estate shakeup, reports emerged earlier this year that the company asked its cloud employees to share desks in some of its largest US office locations, indicating a more permanent transition toward hybrid work models and a focus on real estate efficiency per a CNBC article. Employees at Google Cloud's headquarters were being asked to alternately share desks, working on different days to maximize efficient use of space, a change may or may not find its way into the new Tasman offices. Despite recent layoffs and slowed hiring, this move demonstrates Google's continued efforts to adapt and invest in its cloud division amid economic shifts and the post-COVID era.

The impact of Google's expansion in San Jose on the local economy and business growth has mixed opinions. Bob Staedler, a principal executive with Silicon Valley Synergy, told the Mercury News he believes that Google's Tasman Campus is "good news for San Jose," as it results in more occupied buildings rather than vacant properties. Meanwhile, other experts, including JLL's Bart Lammersen also told the Mercury News that employers must highlight the significance of making office spaces more appealing to draw employees back into the workplace post-pandemic and contribute to sustained economic growth.

All of this comes in the wake of the recent jump in parent company Alphabet's stock resulting from Google's AI-powered Search Generative Experience (SGE) announcent from a few days ago, as we previously reported here on Hoodline. Perhaps this all seems like a drop in the proverbial bucket for a business that can flip a switch to make itself $100 billion more valuable.