Google is exiting more than 1 million square feet of industrial space it leased in the Dallas area last year as the company deals with an apparent surplus of real estate.
The Mountain View, California-based technology giant spent millions of dollars building out the interiors of the space it planned to use to store data center materials at 3400 Catherine Court in Northlake, Texas. Google never occupied the 1.05 million square feet at Northlake 35 Building 1 and the space is back up for grabs.
"Google never moved into the space, but it's all built out, ready for occupancy," Nathan Lawrence, an executive with KBC Advisors who is leasing the property on behalf of the landlord, told CoStar News. "Leasing activity is strong."
The landlord, Clarion Partners, did not immediately respond to inquiries from CoStar News. Google also did not immediately return a request for comment.
The building is part of a larger industrial park called Northlake 35 Logistics Park that transformed a former dairy farm into four industrial hubs.
Google has been ramping up its investments in Texas to meet the growing demand for its data centers and planned to spend $1 billion last year to expand its cloud and data center infrastructure in the state. In North Texas, Google has data center campuses about 26 miles southwest of downtown Dallas in Midlothian and in Red Oak, which is about 19 miles south of downtown Dallas.
Google started building its Midlothian campus in 2019 and said on its website it selected the area because of its energy infrastructure, land and available workforce. Google has also been making deals with renewable energy providers in Texas to help meet its goal of running on carbon-free energy on every power grid where it operates by 2030.
For prospective tenants needing more than 1 million square feet of industrial space in the Dallas-Fort Worth region, there are now seven options available, including Google's former space at Northlake 35 Logistics Park, said Cody Gibbs, CoStar's market analytics director for the Dallas-Fort Worth industrial market.
"All of these sites have been delivered in the last three years, part of a broader challenge facing these newer projects in finding the right tenants," Gibb said, in commenting on Google's exit from the logistics park. "Of the 31.2 million square feet of space delivered within this size range since 2022, over 30% is still available for lease."