By Meghan Hall
Google is continuing to expand its presence in and around its Mountain View headquarters, closing on another modest office building along Clyde Ave. Wednesday. The building, located at 650 Clyde Court, is a one-story office building totaling 34,606 square feet, for which Google paid $26.1 million, or around $754 per square foot, in cash. The sellers were San Francisco-based Graymark Capital and Miami-based Rialto Capital Management.
According to the Mercury News, who first reported the deal, Cushman & Wakefield brokers Todd Beatty, Brandon Bain, Steve Horton and Kelly Yoder were the agents who worked to arrange the transaction. The property also includes 2.3 acres of land around the building, which could accommodate a new construction office ranging in size from 70,000 to 100,000 feet.
Just south of U.S. Highway 101, the new building is close to Google’s Headquarters and is across the street from the newly constructed 385,000 square foot Samsung Research America Campus. Numerous other companies from Wipro Technologies to Upwork to Synopsys and Omnicell, are located nearby.
Graymark Capital’s website states that it had initially purchased the property vacant from a previous owner-user along with Rialto Capital. Public documents show that the pair of firms purchased the property back in 2017 for $14.1 million, or about 407 per square foot, at approximately 55 percent of replacement cost. Graymark had also planned to undertake a full exterior and interior renovation of the building. The property was originally constructed in 1987 by its original owner, an industrial distributor.
The acquisition comes after Google inked a lease for 190,000 square feet at 600 Clyde in February of this year. Google also leased 620 National Ave., a 150,000 square foot office development nearby, earlier this year. In April, Google purchased three buildings — located at 900 Alta Ave., 1053 Joaquin Rd. and 1489 Charleston Rd. — for a combined $250 million.
Competition for space in Silicon Valley, especially in submarkets such as Mountain View and Sunnyvale, remains fierce, according to Kidder Mathews’ First Quarter Silicon Valley Office Report. While large tech companies and developers are currently constructing 4.7 million square feet of office space, roughly 80 percent is already pre-leased. The office vacancy rate in Mountain View hovers at around 4.1 percent. The report also states that during the fourth quarter of 2018, 1,099,148 square feet of office space changed hands, compared with 1,876,579 square feet during the first quarter of 2019. Due to demand from tenants like Google, Kidder Mathews states that rental rates in Mountain View have reached $6.58 per square foot full service, almost nearing those of Palo Alto, the most expensive submarket in Silicon Valley.