Google (NASDAQ: GOOGL) has made a name for itself as one of the most prominent, innovative technology companies of all time. But now, it's looking to shift gears and focus on a side of its business that's fallen somewhat by the wayside -- hardware. In fact, the tech giant is currently making plans to open another campus in Silicon Valley, this time featuring a hardware hub.
Bringing jobs and revenue to San Jose
Since 2018, Google has spent more than $389 million on land in the northern part of San Jose. And now, it's opening a research and development facility with a center for hardware operations and a separate tech campus that will not only house employees, but also be accessible to the public. The new campus will be located in between Google's current Mountain View headquarters and its recently approved San Jose mega-campus.
In fact, Google's new home will fittingly be called Midpoint, and it will include five office buildings connected by a pedestrian bridge. Its new campus plans also feature a shipping warehouse.
For years, Google has focused on its core internet services, including its oft-used Search feature and cloud offerings. But now, the tech giant is looking to scoop up a larger share of the hardware market. The company already has plans to start creating its own chips in house for products such as its Pixel phone.
The real estate impact
Of course, opening a space that's dedicated to hardware could work wonders for Google's bottom line. But these plans are also great news for real estate investors in San Jose.
For one thing, Google's new campus could help boost local property values, both residential and commercial. It could also help struggling businesses in the area thrive by helping to increase the foot traffic they see. And that uptick in revenue could prevent business closures -- and spare commercial landlords the hassle and expense of having to fill vacancies.
Google's new hub could also bring more jobs to the area. And that could result in an uptick in housing demand. In fact, investors who are in the business of purchasing income properties may want to focus on scooping up homes in the vicinity of Google's new campus. There's a good chance they'll manage to command a sizable amount of rent.
Not only is Google's latest expansion plan good news for investors, but it's potentially good news for the office building segment, which has been notably hard hit during the pandemic. Building out office space sends the message that Google clearly thinks remote work will not become the new norm. Quite the contrary -- Google is expecting people to show up to work, and it's looking to build out a transit hub with shuttle bus service to its new campus, bike parking, and showers and locker rooms for commuters.
These days, there's a fear among office REIT (real estate investment trust) investors that office buildings have a very lengthy recovery ahead of them. By affirming its commitment to in-person work, Google could end up breathing life into a sector that really needs a boost right about now.