GOOGLE CLOSES OUT 2015 WITH A SIGNIFICANT MOUNTAIN VIEW OFFICE LEASE

Google Inc. is expanding its presence in Mountain View's Terra Bella neighborhood, signing a lease for a 111,443-square-foot building expected to start construction early this year.

The search-and-advertising giant agreed to lease 1001 N. Shoreline Blvd., a four-story office building being developed by a partnership of Calvano Development Co. and the Carlyle Group, sources confirmed last week. Terms of the financial transaction weren't available.

The deal came at the end of a fairly ho-hum year for Google when it came to office leasing in Silicon Valley, as the company focused on its ground-up development plans for Mountain View. Google also seemed to spend the year digesting the millions of square feet of existing space it bought or leased in 2014.

The new project is located just south of the main gateway to Google's stronghold of North Bayshore. Google already has a presence in the neighborhood, which is filled with mostly tilt-up buildings erected decades ago. But 1001 N. Shoreline will be the most visible Google property when it is completed, and a sign it is continuing to look for opportunities to expand in the city, even as it grows into Sunnyvale, Redwood City, San Jose and Palo Alto.

The Terra Bella neighborhood is also poised to transform in the next few years in other ways. Late last year, Calvano and Carlyle gained "gatekeeper approval" from the city for a plan to redevelop 7.15 acres adjacent to the new office building into residential. The proposal is to build two residential buildings with 173 units and 261 units, each with about 3,000 square feet of ground-floor retail. The gatekeeper approval is not a green light for the project, but is a crucial first step by freeing up staff to study the project and eventually present it to the city council.

The area has been seen as a potential "change area" for larger-scale residential conversion, too. Last summer, several council members urged studying the entire Terra Bella area for residential zoning, as the city grapples with crushing demand for housing. The idea gained support from property owners including Google, Embarcadero Capital Partners and Zappettini Investment Co., all of whom signed a joint letter to the city in November to support residential use in the area. The council ended up deciding to stick with case-by-case change requests.

Calvano has also been busy assembling other pieces of land in the area. Mark Calvano, founder of San Francisco-based Calvano Development Co., declined to comment on the Google deal this week, but he said: "The neighborhood has promising opportunities, and other things are in the works.

Google didn't immediately comment. Newmark Cornish & Carey's Phil Mahoney and Randy Gabrielson represented the property owner.