Google has announced plans to invest $7 billion in offices and data centers this year across 19 states to expand its reach across the country and bolster the data centers that enables online search. The company had earlier set aside $13 billion and $10 billion for similar expenditures in 2019 and 2020, respectively.
Google is also moving forward on a $1 billion pledge to advance sustainable housing in the San Francisco area. According to Adam Segal, the chief executive of Cove, a real estate technology firm, Google’s real estate portfolio is now worth more than $50 billion and includes asset classes ranging from multi-family to offices. “Google leverages real estate to grow their business and brand,” he says.
2020 was a choppy year for the commercial markets. According to VTS, a real estate software company, demand for office space tanked 68% in New York City over the last year; in San Francisco it fell 52%, while Seattle saw a 67% drop.
Analysts say that commercial properties in Manhattan have taken major hits—as much as 40% in some cases—as landlords struggle to lure tenants back, and the world grapples with the changing nature of work spurred by Covid-19.
The announcement comes as many technology firms, including Facebook, Twitter and Square, have signaled that they will enable some workers to work remotely forever. In Silicon Valley, the nexus of tech innovation, there have been concerns—and some celebrations—that startup employees may flee the area for good in search of cheaper alternatives.
Google reportedly has nixed a permanent work-from-home model, arguing that some in-person collaboration remains critical to productivity. Thursday’s news further emphasizes that point of view, both in the Valley and far beyond.
“I believe a lasting economic recovery will come from local communities, and the people and small businesses that give them life,” Pichai wrote. “Google wants to be a part of that recovery.”
