Putting aside years of fierce competition for scarce real estate in Mountain View, Google Inc. and LinkedIn Corp. have struck a “grand bargain” that redraws the map for each company’s presence in Silicon Valley, ending a stalemate that frustrated their development plans.
Executives say the blockbuster property swap — involving 1 million square feet of existing buildings, including LinkedIn's current headquarters, and 2.4 million square feet of future development capacity — benefits both sides: It will give Google control over critical puzzle pieces in North Bayshore, providing a path forward for the search giant’s futuristic vision there as LinkedIn departs the Google-heavy North Bayshore business district. At the same time, LinkedIn will gain property — elsewhere in Mountain View and in Sunnyvale — that allows it to build out a cohesive corporate campus years earlier than anticipated under previous plans for a costly planned mixed-use headquarters called Shoreline Commons.
“We spent a lot of time and energy on Shoreline Commons, but it was complicated by one single fact: That it was going to take five to six years to build,” said Jim Morgensen, LinkedIn’s vice president for workplace, in an interview on Monday. “And that’s a long time for a tech company to have multiple, split campuses.”
The deal is a remarkable sign of collaboration for two business rivals that have butted heads for years when it comes to real estate. The dollar value of the swap wasn't immediately available, but LinkedIn executives said neither side is paying "a premium," without giving further details.
Under terms of the transaction, Google and LinkedIn will exchange several leased and owned pieces of property:
- LinkedIn will acquire ownership of two major large Google properties in Mountain View: 700 and 800 East Middlefield in Mountain View, totaling more than 28 acres and 460,000 square feet of building area. Google spent $250 million and $33 million, respectively, to acquire them in 2014; the 700 Middlefield site includes the possibility of building 1 million square feet on the site.
- LinkedIn will also take over Google’s lease of 950 and 1000 Maude in Sunnyvale, the former Palm Computing headquarters that totals 285,000 square feet, near the Middlefield sites and other LinkedIn buildings in Sunnyvale.
- Google will acquire critical pieces at the entrance to North Bayshore owned by LinkedIn, including the Lester Industrial Park (former Gold’s Gym) where LinkedIn planned to build Shoreline Commons. LinkedIn paid a total of $97.3 million to buy them in 2014 and 2015. ( Google also acquires the option to buy the Sports Page property at 1431 Plymouth.) And — crucially for Google — LinkedIn got the City Council's blessing for 1.4 million square feet of office space there.
- Google also will take over LinkedIn’s lease for 370,000 square feet on Stierlin Court in Mountain View's North Bayshore, one of the few pieces of real estate Google didn’t control near its headquarters.
Original article posted on: bizjournals.com