Google is remaining committed to large new office spaces it has leased but not yet occupied in Austin, Texas, and in Los Angeles as other tech giants make deep cuts to their real estate portfolios amid massive layoffs.
The search engine provider plans to open the 584,000-square-foot One Westside campus at 10800 W. Pico Blvd. in Los Angeles, and complete the interior build-out of the nearly 800,000-square-foot tower at 601 W. Second St. in downtown Austin at some point this year, according to a source familiar with the company’s plans.
Google pre-leased the space at both buildings before the pandemic in 2019 at a time of massive growth for the tech industry. Now Google corporate parent Alphabet is laying off 12,000 workers, joining tech companies including Amazon, Salesforce, Twitter and Facebook parent Meta that are reducing their workforces in response to declining consumer demand and drops in advertising revenue, leading to a reduction in their space needs.
Google's layoffs led to speculation it might sublease its not-yet-occupied expensive real estate in Southern California and Central Texas, but that is not the case. A Google representative declined to comment.
Even so, these plans can still change quickly. Earlier this month, Seattle e-commerce giant Amazon paused construction on the second phase of its HQ2 project in Arlington, Virginia, after indicating at the beginning of the year that it sought to keep building in the city, which was selected as its HQ2 location in 2018. That said, Amazon still plans to bring 25,000 workers and $2.5 billion in investment to the area by 2030.
Austin Tower
Construction started in 2019 on the Google-leased 35-story building that is informally known in Austin as the sailboat building because of its design that resembles a sail rising over Lady Bird Lake.
The building's developers, Dallas-based Trammell Crow Co. and partner MSD Capital LP, completed the core and shell in 2022 but Google has yet to complete the interior, let alone move in.
Trammell Crow told CoStar News it doesn't comment about its tenants' plans or operations.
The tower will offer 180-degree views of the lake with outdoor terraces on every floor of the building, which was designed by Pelli Clarke Pelli and STG Design. FMG Design and Austin-based Cushing Terrell are handling the building’s interiors.
Google already has a large presence in downtown Austin, occupying a little more than 300,000 square feet at 500 W. Second St., which is located one block away from the sailboat building.
Los Angeles Plans
Google signed a 14-year lease at One Westside in January 2019, but rumors started swirling late last year as to whether Google would indeed occupy the space.
Despite fears of Google not moving in, the tech giant expects to open in the 584,000-square-foot campus at 10800 to 10900 W. Pico Blvd. later this year, according to a source with direct knowledge of construction.
The $500 million office is an adaptive reuse of the former Westside Pavilion shopping mall into a Class A office space with a skylight, open-air courtyard and a rooftop garden deck. The office was designed by Gensler.
Two major real estate developers, Santa Monica-based Macerich and Los Angeles-based Hudson Pacific Properties, own One Westside and delivered the space to Google for tenant improvements in the fourth quarter of 2021, according to a filing last month with the Securities and Exchange Commission.
“Google is expected to take occupancy in 2023,” Macerich said in an SEC filing from February.
Google is expected to start making cash rent payments in May 2023, Hudson Pacific said in an SEC filing from February. Google's annualized base rent is expected to be $36.6 million, according to the filing.