Google plans expansion in Mountain View, now eyeing north San Jose

Google is expanding in its hometown of Mountain View — and for the first time is strongly considering planting its flag in north San Jose in a big way, an indication that job growth in Santa Clara County remains robust.

Google is in talks to lease two expansion sites in Mountain View that together total 357,000 square feet, and also wants to grab about 150,000 square feet or more in north San Jose, according to multiple sources familiar with the space hunts and the commercial real estate market in Silicon Valley.

“Silicon Valley is a hot area, and this is where talented people want to live,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

The two Mountain View sites that Google is eyeing, the sources said, speaking on condition of anonymity because the discussions are private, are a 133,000-square-foot office project at 1001 N. Shoreline Blvd. being built by Calvano Development, and a 224,000-square-foot office project at 1625 Plymouth St. being developed by Broadreach Capital Partners.

Google’s efforts to broaden its reach in Silicon Valley make sense.

“This is not a bubble,” Levy said. “This is based on solid growth.”

What’s more, development and economic experts say Google’s interest in expansion isn’t likely to end any time soon.

“Everything we are looking at suggests that the growth we are seeing for Google and the technology sector is sustainable,” said David Vanoncini, a managing partner and senior vice president with the San Jose office of Kidder Mathews, a commercial real estate firm.

The two sites in Mountain View that Google is actively considering have yet to be constructed.

San Francisco-based Calvano Development wouldn’t discuss any specifics about potential tenants that might be in lease negotiations for the 1001 N. Shoreline site.

“We have had a number of serious inquiries,” said Mark Calvano, a principal executive with Calvano Development.

The company would consider constructing the office project on a speculative basis, that is, without a tenant and a signed lease, if the market is right.

“I don’t think the office market in Silicon Valley has ever been better,” Calvano said. “Technology is our future and companies are making incredible products.”

It also makes sense for Google to be looking in north San Jose, because space is getting tight in the Mountain View and Sunnyvale areas, and is nearly unavailable in the Cupertino, Palo Alto and Menlo Park markets.

“North San Jose is going to be a hotter market over time,” Levy said. “Office rents in the northern part of Santa Clara County are getting expensive. And you will have those BART extensions in Milpitas and Berryessa, which will have shuttles and provide more access to north San Jose.”

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