MOUNTAIN VIEW — In an unexpected mega-deal, Google has paid $1 billion for a huge Mountain View business park, a head-spinning acquisition that is deemed to be the Bay Area’s largest real estate purchase so far in 2018.
Google’s new Mountain View purchase means that in the two years since the company began to collect properties in downtown San Jose for a proposed transit village, the search giant has spent at least $2.83 billion in property acquisitions in Mountain View, Sunnyvale, downtown San Jose and north San Jose alone.
Adding to the eye-popping numbers: Google’s spending activity in those four markets reaches $3 billion when including the agreed-upon price for the search giant’s pending purchase of several government-owned parcels, along with the minimum value of a big set of surface parking lots that Google intends to buy from Trammel Crow.
As a result of the most recent purchase, Google now owns a 51.8-acre site with 12 buildings, each two stories high. The big parcel has addresses ranging from 2011 to 2091 Stierlin Ct. in Mountain View.
The newly acquired site in Mountain View is larger than the property that accommodates the company’s Googleplex headquarters a few blocks to the west, and also exceeds the size of the parcel across the street where Google has begun construction of an iconic “dome” campus that features canopies and tents.
The current configuration of Shoreline Technology Park is dominated by two-story buildings with plenty of surface parking lots sprinkled throughout. That arrangement means it’s possible the heights of the structures could be significantly increased were the current structures to be replaced with modern buildings that are somewhat higher, or with larger footprints.
Google is the principal occupant of Shoreline Technology Park. A survey of the site this month indicated that Alexza Pharmaceuticals is Google’s only tenant in the complex.
Since a December 2016 purchase nearly two years ago of an old Pacific Bell building near the Diridon Station in San Jose, Google, directly or through a development alliance, has spent at least $1.32 billion buying sites in Sunnyvale, $1 billion acquiring properties in Mountain View, $271.8 million in north San Jose and $234 million obtaining parcels in downtown San Jose.
Including the company’s agreement to pay $109.9 million for government-owned properties in downtown San Jose, as well as the minimum value of $58.5 million for the nearby Trammel Crow-owned site near Diridon Station, the Google buying surge in those four market alone reaches the $3 billion mark.
A Google representative confirmed the $1 billion purchase price for the acquisition of Shoreline Technology Park, but didn’t discuss the situation beyond that.
The seller of the site in the $1 billion transaction that was completed on Nov. 20 was an affiliate of Irvine-based HCP, a real estate investment firm, Santa Clara County property records show. HCP stated that it realized a gain of $700 million from the sale. The assessed value in mid-2018 of the Mountain View site was $367.3 million.
The deal also appears to be the largest real estate transaction — by far — to this point in 2018 in the Bay Area. Prior to Google’s purchase, the highest price paid in Silicon Valley was a $284 million acquisition by developer Jay Paul of the Cityview Plaza office, retail and restaurant complex in downtown San Jose in July. That was topped by the October deal for San Francisco’s iconic Ferry Building complex, a $291 million transaction.
Google’s Mountain View deal also is deemed to be the second-largest property purchase in the United States so far in 2018, with the exception of a transaction in New York City’s Manhattan borough — also completed by Google. In March, Google paid $2.4 billion for Chelsea Market, which experts estimated at the time was the nation’s biggest property acquisition.