Lendlease has signed a $21 billion deal with Google to develop three major areas in San Francisco in what is the developer’s largest deal to date.
Google and Lendlease have entered into a joint agreement to undertake the masterplanning and development of three major land holdings in California’s San Francisco Bay Area.
The agreement will see the internet giant and ASX-listed Lendlease work together over the next 10 to 15 years redeveloping the global tech company’s Silicon Valley landholdings in San Jose, Sunnyvale and Mountain View into mixed-use communities.
The partnership comes after Google’s announcement of a $1 billion housing commitment for up to 15,000 homes in the Bay Area last month by its chief executive Sundar Pichai.
The Bay Area, home to Silicon Valley and the birthplace of Google more than 20 years ago, has since seen a growing housing affordability crisis in the region.
Lendlease estimates that it will develop up to 15 million square feet of residential, retail, hospitality, and other associated community uses in the new neighbourhoods.
While Google will focus on developing its office space within these mixed communities.
The entire project, comprising residential, retail, and hospitality components has an estimated end development value of US$15 billion (about A$21 billion).
Google’s Real Estate vice president David Radcliffe said development work on the project could kick off by 2021, subject to planning approval, with Lendlease playing a key role in delivering a minimum of the 15,000 new homes on the landholdings.
“[The] agreement expands on an existing and successful partnership that will help us deliver on two important objectives,” Radcliffe said.
“Our commitment to accelerate the production of residential units in the Bay Area, and our plan to build mixed-use developments.”
The “existing and successful partnership” includes the pairs working history, after bidding on a $2 billion development project on Sydney's city fringe ultimately rejected by the New South Wales government in 2016, for the redevelopment of a former industrial site in Rozelle — the White Bay Power Station.
Lendlease US chief executive Denis Hickey said the deal, signed between the two parties in San Francisco, edges its global development pipeline close to $100 billion.
“It's the largest deal in Lendlease’s 61-year history,” Hickey said.
“This joint agreement between Google and Lendlease will help address the need for new housing in the San Francisco Bay Area.
“We’re eager to contribute our world-class approach to creating unique urban communities.”