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Google boys continue to grow their commercial property portfolio

Google acquiring office park in the Silicon Valley,  hotspot of Mountain View. Record price in the process will be around $250 million.

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With the company activities growing and diversifying at a frightening rate, Sergei Brin and Larry Page, founder of search engine giant Google are finding it increasingly difficult to find office space for all their talented staff.

That’s why they have  been pounding the foot walks of Mountain View in  the county of Santa Clara , part of the  San Francisco Bay Area of California where their main activities are based.

Brin and Page’s footwork appears to have paid off, with news that they are reportedly about to put pen and paper on a contract to acquire major piece of real estate, conveniently situated in the very heart of Mountain View.

The deal in question is to acquire buy a 400, 000-square-foot office park, known as the Middlefield campus,  currently occupied by electronic design automation company Synopsys Inc.   Synopsys Inc. Is scheduled to placate the property during the early part of next year to move to a new office block, and Google have gotten quick with a bid  to buy the property, consisting of four separate buildings, covering a total of 24 acres, containing one million-square of office space.

Google are reported to be offering  $625 per square foot for the property, which is almost double  the average sale price of office space, a major premium when you consider that local tax records list the assessed value of the complex at just $79 million. Curiously Mountain View is still graded as in the “ suburban metro market” as far as office space valuation is concerned, despite the fact that falls into one of the busiest and most active hotbeds of office activity in the country.

Commercial real estate onlookers predict that Google will eventually pay around $250 million for the complex making it the largest deal transacted  in Silicon Valley so far in 2014, once again evidencing  the genuine problems that the the key players in the high-tech industry centered around Mountain View, as the neighboring cities of Palo Alto, Los Altos, and Sunnyvale, have in finding suitable office space, with price obviously not being a barrier.

Google been especially active in acquiring property in recent years having reportedly signed leases valued at more than $330 million  to rent or buy eleven  properties in Mountain View and its surrounding areas. That connectivity has made them by far and away the leading tenant in the region, both in terms of number of properties as well as their total square footage.

That figure does not take into account the Moffett Federal Airfield, with Google will be soon begin renting from the US government.

Keeping all of the facts and figures into proportion, is considering that  Google’s revenue jumped by 19 percent in the first quarter of 2014 reaching $15.2 billion, up from $12.94 billion for the same period last year. With that kind of turnover and profitability to match, Google can allow themselves to wait  for the right property, along  and apparently willing to pay any premium to maintain continuity in their dynamic business activities, and if not capable of keeping them working under the same roof,  at least somewhere in the same location.

If, as expected, the Middlefield complex deal comes to pass, it will considerably add to the concentration of Google activities in the neighborhood, with the company having recently taken possession of the Quad, a large office campus within walking distance of the proposed new property.

Having such high-powered neighbors undoubtedly has its advantages for the local population, but come with a heavy price,  particularly  the heavy traffic burden that its roadways have to cope with, and apparently not too well. Reportedly major  traffic jams have become part of the life for residents of Middlefield, especially intense during the morning and evening rush hours, which can last for hours.



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