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Google halts plan to build 15K homes in San Francisco over ‘market conditions’

A developer who was planning to turn the area around Google’s San Francisco headquarters into a 15,000-unit residential campus with office space and a hotel has pulled out of the project, citing “current market conditions.”

However, Google confirmed to The Post that despite partnering with developer Lendlease, the project should not be delayed and will move forward with the project, and is considering expanding its relationships with other developers. He said that

Published by Lendlease press release On Friday, the company said it would move forward with the tech giant’s so-called “San Francisco Bay Project” following “the determination by both organizations that the existing agreement is no longer mutually beneficial given current market conditions.” announced that it had decided not to do so.

“As part of the decision to terminate these agreements, Lendlease will receive consideration payments.”
“for the value created through the entitlement and master planning process,” the company added, without disclosing how much Google invested.

Lendlease was awarded the deal in 2019, but the developer was not scheduled to break ground on the four master-planned districts, worth a total of $15 billion, spanning Sunnyvale, San Jose and Mountain View until 2026.

Real estate developer Lendlease announced Friday that it has canceled plans with Google to create the so-called “San Francisco Bay Project” “in light of current market conditions.”
Benny Marty – Stock.adobe.com

“As we have previously shared, we are optimizing our real estate investments in the Bay Area, and as part of that effort, we are exploring various options to advance development projects and realize our housing commitments. ,” development director Alexa Arena told the Post. “I would like to thank Lendlease and the work the team has done to get us to this point.”

But in the five years since Google announced the project, the real estate market has changed significantly, with long-term borrowing rates hovering near 8% since September, threatening to force buyers out of the market on price. be.

Last month, interest rates on the benchmark 30-year mortgage reached 8% for the first time since 2000, according to . Mortgage Daily NewsHowever, as of Friday, that number stood at 7.51%.

Still, mortgage rates this high add hundreds of dollars a month to borrowers and limit what they can pay in a market that is already unaffordable for many Americans.

In times of economic uncertainty, Google continues to cut jobs, including laying off dozens of employees in its new Google News division just two weeks ago.

A spokesperson for the Alphabet union announced that 40 to 45 Google News employees have been laid off. told CNBC at that time.

The Alphabet Inc.-owned search engine is also cutting jobs at its healthcare analytics subsidiary Verily and its robotaxi unit Waymo, but it wasn’t immediately clear how many people were let go from each Google-owned brand.

Despite reportedly investing $1 billion in the project, Google has been cutting back on its workforce, laying off 12,000 staffers earlier this year and last month announcing the new Google News division’s largest 45 employees were laid off.
AP

The job cuts come after Google laid off about 12,000 U.S. employees earlier this year, but CEO Sundar Pichai said in an internal memo that its parent company, Alphabet, , level and region’ of employees were affected.

Alphabet’s workforce grew during the pandemic from 119,000 at the end of 2019, when it first announced the San Francisco Bay Project, to nearly 187,000 by the end of last year, according to its latest regulatory filings. It increased rapidly.

The cancellation of the once-glitzy project, which was scheduled to break ground in 2026, will strip the region of an additional 15 million square feet of residential, retail and hospitality space.

Google announced it has committed $1 billion to the project, which aims to address the Bay Area’s housing shortage. The project is spending $700 a month on 4-foot-tall, 3.5-foot-wide “pod” spaces for residents to sleep. I can’t afford to buy an apartment.

Google has halted real estate development as sky-high mortgage rates add hundreds of dollars a month to costs for borrowers and limit what they can afford in a market already out of reach for many Americans. .
nobyline@backgrid / BACKGRID

The pods are less than half the size of Candlestick Point RVs, which the city opened for homeless people in January 2022. He has 30 of his RVs in a “secure parking lot” called the Bay View Triage Center, which costs him $12,000 per month per vehicle in San Francisco, but residents can use his 24/7 parking lot. Live rent-free with security.

However, the path of the San Francisco Bay Project was by no means a smooth one.As of 2019, four years after the project was announced, Google update San Jose and Mountain View officials announced that 12,900 of the 15,000 planned homes have been approved for development.

It’s unclear at this time whether Google and Lendlease may restart the project in the future.

Representatives for both companies did not immediately respond to The Post’s requests for comment.

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