The property is located in the Northwest section of the researchcenter, overlooking the Bay. Google agreed to an initial 40-yearlease that includes periodic escalations and adjustments of rentand multiple 10-year extension options that could extend the leaseby an additional 50 years. Google's initial base rent will be $3.66million per year. Depending on the escalations, which are based oninflation, the total lease value for the initial 40-year term issomewhere between $150 million and $200 million.

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Per the agreement, construction will proceed in three phases,with the first phase slated to begin by the end of September 2013,the second phase by 2018 and the third by 2022. Google says themajority of the development will consist of office and R&Dspace but also will include company housing and other amenitiessuch as dining, sports, fitness, child care, conference andparking, as well as recreation and park facilities. NASA says itwill retain control over the project during its construction phase,including approving the design, issuing building permits,conducting inspections and monitoring construction.

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A NASA spokesperson tells GlobeSt.com that the initial base rentof $3.66 million--established by a panel of independentappraisers--is based on an initial land value of $52.25 millionmultiplied by an initial interest rate of 7% per annum. The baserent will be escalated by inflation (capped at a 15% increase) onOct. 1, 2013, and every 10 years thereafter. NASA and Google agreedin the lease that, notwithstanding future reappraisals, base rentwill never be less than $3.66 million, and that the rate of returnwill never be less than 4.5% per year or greater than 9.5% peryear.

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Google will pay NASA an initial annual vase rent of $3.66million (initial land value of $52.25 million multiplied by aninitial rate of return of 7 percent per annum) which wasestablished by a panel of three independent, licensed, experienceappraisers who are Member, Appraisal Institute (MAI). The panel ofappraisers also set periodic rent escalation and scheduledreappraisals. The panel of appraisers determined that base rentwill be escalated by inflation (capped at a 15% increase) on Oct.1, 2013, and every 10 years thereafter. NASA and Google agreed inthe lease, that notwithstanding future reappraisals, base rent willnever be less than $3.66 million, and that the rate of return willnever be less than 4.5% per year nor greater than 9.5% peryear.

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Since signing the non-binding agreement inSeptember 2005, NASA and Google have collaborated on severalprojects. Their Planetary Content project develops software thatmakes it easier for the science community to publish planetary datavia the Internet and has provided high-resolution lunar imagery andmaps to the Google Moon program and resulted in the "NASA" layer inGoogle Earth. Similarly, the partnership's Global Connectionproject enhances the "National Geographic" layer in Google Earth byembedding geo-referenced stories and images from around the world,and their Disaster Response project develops prototype softwaretools to help improve first response to large-scale naturaldisasters.

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NASA Research Park, the former Moffett Naval Air Field, isentitled for 4 million sf of development and currently housesalready houses 30 private companies, six non-profits and fiveacademic partners, including Carnegie Mellon University and theUniversity of California at Santa Cruz. The universitiescollaborate with NASA on a broad spectrum of fields includingbiotechnology, environmental technology, nanotechnology,communications and homeland security. The existing buildings atNASA Research Park that meet the necessary safety and codestandards are 99% leased, according to a NASA spokesperson.

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NASA Ames Research Center was founded Dec. 20, 1939 as anaircraft research laboratory; it became part of the NationalAeronautics and Space Administration (NASA) in 1958. Ames, one of10 NASA field installations, plays a role in virtually all NASAmissions. It is home to some $3 billion in capital equipment, 4,000research personnel and has a $775 million annual budget.

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In the last four years, Google has added more than 17,000employees and has been adding to its real estate holdings toaccommodate the growth. In mid-2006, Google acquired its 978,000-sfheadquarters campus here for $319 million from Whitehall ParallelReal Estate LP XIII, one of the Whitehall Real Estate Funds managedby Archon Group LP, an affiliate of the Dallas-based Goldman SachsGroup Inc. The addresses of the campus are 1600 AmphitheatreParkway and 1200-1500 Crittenden Lane. WXIII sold the buildings andits leasehold rights on the underlying dirt, which is owned by theCity of Mountain View.

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This timelast year, Google leased Agilent's 224,000-sf headquartersin Palo Alto from Jay Paul Co. Atthe start of 2007, Google subleased 210,000 sf at 345 SpearSt. that is controlled by clothier Gap Inc. The sublease isco-terminus with Gap's master lease, which runs into 2010,according to the source.

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