Google (NASDAQ: GOOGL) is known as a company that invests heavily in office space. And now, it's headed to San Jose, California. This week, city officials approved a plan for Google to build a massive downtown campus. This new campus, which will really function more like an urban village, will include 7.3 million square feet of new office space, plus $1 billion in new shops, plazas, parks, and other space designated for public use.
As part of its plan, Google intends to preserve iconic older buildings. It will also be investing an additional $200 million in the community itself, including 1,000 affordable housing units, homeless prevention programs, and support for local small businesses.
Also in the works are plans to engage students from underserved school districts who show an interest in technology by hosting career days, computer science workshops, and on-site field trips.
Not only will the new campus create as many as 20,000 jobs, but the construction aspect of it alone will put a lot of paychecks in a lot of people's pockets. Google has also pledged to stick to a 30% local hire rate for on-site construction and has committed to paying state prevailing wages to all construction workers involved in the build.
Best of all: Google's new campus will be eco-friendly, offering onsite solar power to reduce emissions.
A boon to local real estate
This isn't the first time a tech giant is coming in and sinking money into not just a new office campus but a surrounding city or community. Oracle (NYSE: ORCL) recently got plans approved to build a $1.2 billion office campus in Nashville, Tennessee. Like Google, Oracle will be investing separate funds -- $175 million worth -- in local infrastructure to help boost the city.
At first, Google's plans were met with resistance by some who worried that home prices in the area would explode following the construction of the campus, pushing lower-wage residents out. But actually, Google's presence could really work wonders for that specific corner of San Jose.
Once Google's new campus is fully functional, throngs of new employees could drive a lot more traffic to local businesses, from shops to bars to restaurants. Also, over the past year, many local businesses have shuttered permanently in the wake of the pandemic, leaving commercial landlords with vacancies to fill. But in the coming years, new businesses may be more enticed to come in and replace them, thereby helping to compensate.
Google's presence in the area could also drive property values upward, all the while creating the need for additional housing. That gives multifamily investors a key opportunity to buy up properties in the area and profit big time as Google embarks on a hiring spree.
The Millionacres bottom line
At the end of the day, there are multiple ways Google's San Jose initiative could end up being a very positive thing for the local real estate market. And since it will take time to complete (Google hopes to break ground on the first new campus buildings in 2023), investors can start digging into different opportunities now, before the market really explodes.