X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

MOUNTAIN VIEW, CA-Google has agreed to lease 42.2 acres within NASA Research Park at Moffett Field, where NASA’s Ames Research Center is located, for development of a 1.2 million-sf office/R&D campus that also will include company housing. The deal comes nearly three years after NASA and Google signed a non-binding agreement to collaborate on technology-focused R&D activities. Moffett Field is 10 minutes from Google’s world headquarters.

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

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 the majority of the development will consist of office and R&D space but also will include company housing and other amenities such as dining, sports, fitness, child care, conference and parking, as well as recreation and park facilities. NASA says it will retain control over the project during its construction phase, including approving the design, issuing building permits, conducting inspections and monitoring construction.

A NASA spokesperson tells GlobeSt.com that the initial base rent of $3.66 million–established by a panel of independent appraisers–is based on an initial land value of $52.25 million multiplied by an initial interest rate of 7% per annum. The base rent will be escalated by inflation (capped at a 15% increase) on Oct. 1, 2013, and every 10 years thereafter. NASA and Google agreed in the lease that, notwithstanding future reappraisals, base rent will never be less than $3.66 million, and that the rate of return will never be less than 4.5% per year or greater than 9.5% per year.

Google will pay NASA an initial annual vase rent of $3.66 million (initial land value of $52.25 million multiplied by an initial rate of return of 7 percent per annum) which was established by a panel of three independent, licensed, experience appraisers who are Member, Appraisal Institute (MAI). The panel of appraisers also set periodic rent escalation and scheduled reappraisals. The panel of appraisers determined that base rent will be escalated by inflation (capped at a 15% increase) on Oct. 1, 2013, and every 10 years thereafter. NASA and Google agreed in the lease, that notwithstanding future reappraisals, base rent will never be less than $3.66 million, and that the rate of return will never be less than 4.5% per year nor greater than 9.5% per year.

Since signing the non-binding agreement in September 2005, NASA and Google have collaborated on several projects. Their Planetary Content project develops software that makes it easier for the science community to publish planetary data via the Internet and has provided high-resolution lunar imagery and maps to the Google Moon program and resulted in the “NASA” layer in Google Earth. Similarly, the partnership’s Global Connection project enhances the “National Geographic” layer in Google Earth by embedding geo-referenced stories and images from around the world, and their Disaster Response project develops prototype software tools to help improve first response to large-scale natural disasters.

NASA Research Park, the former Moffett Naval Air Field, is entitled for 4 million sf of development and currently houses already houses 30 private companies, six non-profits and five academic partners, including Carnegie Mellon University and the University of California at Santa Cruz. The universities collaborate with NASA on a broad spectrum of fields including biotechnology, environmental technology, nanotechnology, communications and homeland security. The existing buildings at NASA Research Park that meet the necessary safety and code standards are 99% leased, according to a NASA spokesperson.

NASA Ames Research Center was founded Dec. 20, 1939 as an aircraft research laboratory; it became part of the National Aeronautics and Space Administration (NASA) in 1958. Ames, one of 10 NASA field installations, plays a role in virtually all NASA missions. It is home to some $3 billion in capital equipment, 4,000 research personnel and has a $775 million annual budget.

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

This time last year, Google leased Agilent’s 224,000-sf headquarters in Palo Alto from Jay Paul Co. At the start of 2007, Google subleased 210,000 sf at 345 Spear St. that is controlled by clothier Gap Inc. The sublease is co-terminus with Gap’s master lease, which runs into 2010, according to the source.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.