The multinational tech giant Google and Lendlease, the Australian construction and real estate company axed their deal of building homes, offices, and retail spaces worth 15 billion US dollars in Silicon Valley, California.
The project was called the San Francisco Bay Project and the decision to call it off was a mutual agreement made by both the companies as the deal seemed to be financially non-beneficial when the current market conditions were analyzed. The project was to build homes and offices in four districts across cities Sunnyvale, San Jose, and Mountain View.
The news of the project setback comes as Google is acting on in-depth cost-cutting and employee slashing and the real estate market is also fluctuating. The halt of the San Francisco Bay Project with Lendlease is just another move Google is making after a list of community investment call-offs.
Google Says:
A spokesperson from Google talking about this said that they were still looking out to deliver on the housing commitment that they had made but their agreement would be with someone other than Lendlease and the other company would take up the position as its developer.
The spokesperson also said that the company was seeking to broaden its relationships and would work with capital partners and developers to proceed further with the Bay Area project. It was also known that Google would be continuing its mixed-use entitlements and investing in infrastructure.
Alexa Arena, the Senior Director of Development at Google provided a statement on Friday and in it, she said that as it was shared earlier, Google has been optimizing the real estate investment in the Bay Area, and part of that work was looking at a variety of options to move their development projects forwards and deliver in their housing commitment. She added that the company appreciates Lendlease and the work that the entire team had done to get it to the current point.
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Lendlease Says
Lendlease released a statement that said the decision to end those agreements followed a comprehensive review by Google for its real estate investment. The statement also said that both organizations were able to determine that the existing agreements were no longer mutually beneficial based on the current market conditions.
The construction of the project was set to commence during the 2026 fiscal year of Lendlease.
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The San Francisco Bay Project As It Was Announced
Back in 2019, Sundar Pichai, the CEO of Google said that their goal was to help communities succeed over the long term and ensure that everyone has access to opportunities whether or not they work in tech.
It was in 2019 that Google made a billion-dollar deal intending to make housing more affordable, as housing was getting significantly unaffordable in the region. Google had announced it would allocate at least $750 of the land that it owns and repurpose it to build a minimum of 15,000 homes designed for people of different income levels. Also, it would use 250 million US dollars as a developer incentive fund to construct around 5,000 housing units.
