Alphabet’s Google has officially pulled the plug on a substantial development venture in California’s Silicon Valley, which would have entailed building homes, offices, and retail spaces worth a staggering $15 billion. The partnership between Google and Australian developer Lendlease has, in the words of Lendlease, been “mutually reached” to cease the San Francisco Bay Project, originally envisioned to encompass four master-planned districts in San Jose, Sunnyvale, and Mountain View.
The decision to terminate these agreements, as stated by Lendlease, emerged from a thorough review by Google of its real estate investments. Both parties concluded that the existing agreements no longer served mutual benefit under the current market conditions.
Google affirmed its ongoing commitment to housing, though it clarified that Lendlease would no longer serve as its exclusive developer. The tech giant expressed its intention to broaden its relationships, working with various developers and capital partners to propel the Bay Area developments forward. Google plans to continue advancing mixed-use entitlements and investing in infrastructure.
According to Alexa Arena, Google’s Senior Director of Development, “We’ve been optimizing our real estate investments in the Bay Area, and part of that work is looking at a variety of options to move our development projects forward and deliver on our housing commitment.”
Construction for the project had initially been slated to commence during Lendlease’s 2026 fiscal year.
This decision arrives amidst a period of cost-cutting and layoffs for Google, coinciding with a challenging landscape for commercial real estate. The development’s discontinuation is the latest in a series of setbacks affecting major tech companies’ community investments. It introduces a degree of uncertainty to Google’s highly-touted plans to contribute to resolving the affordability crisis in the tech-driven Bay Area.