The Silicon Valley-based tech giant, already a big presence in the Puget Sound area, is working with Vulcan Real Estate on development plans.
Google is coming to South Lake Union in a big way.
The technology giant announced Thursday it is working with Paul Allen’s Vulcan Real Estate to move into 607,000 square feet of office space in four buildings planned on Mercer Street between Terry and Fairview avenues North.
Google will give Amazon.com some competition in the race to turn a once-sleepy Seattle neighborhood into an even bigger arena for tech powerhouses.
Amazon, which frequently works with Vulcan, occupies 2.7 million square feet of space in South Lake Union, about a quarter of the total office space in the neighborhood.
Google has not said how many people it envisions in the new buildings, but between 3,000 and 4,000 employees could fit within the office space. The Mountain View, Calif., company employs 1,900 in Washington state, including about 1,000 in Kirkland and most of the rest in Seattle’s Fremont neighborhood.
The new office complexes will be nearly double the size of Google’s massive Kirkland campus, which itself recently doubled in size after an expansion project.
Google has said it is committed to the Puget Sound area, largely because of Seattle’s deep talent pool for software engineers and other technical jobs. The company was an early arrival from Silicon Valley to establish an outpost here. Hordes of other tech companies have followed, including Apple, Facebook and Uber.
The talent already in South Lake Union might be part of the reason for Google’s decision to move to the area.
Amazon has some of the strongest cloud-computing talent in the world, as evidenced by its market-leading Amazon Web Services unit. Google has plans to grow its own cloud business, which ranks third behind Amazon and Microsoft. The company announced earlier this week it would add data centers across the world to rapidly scale up its cloud services.
According to the South Lake Union plans, Google will occupy six stories in four office buildings. There will be 14,000 square feet of retail space on the ground floors, and two of the buildings will be topped with eight to nine stories of apartments — 151 units in total.
“Google will add tremendously to the neighborhood,” said Lori Mason Curran, Vulcan’s director of real-estate investment strategy.
The company plans to leave its building in Fremont when construction in South Lake Union is finished.
“We’ve loved being in the Fremont neighborhood but will need a bit more breathing room,” Google Seattle site lead Clyde McQueen said in a statement. “We’ll still catch a view of Lake Union, just from a new location. We’re looking forward to walking, biking and riding the streetcar through the neighborhood.”
Construction would begin in 2017 and be completed in 2019. GLY Construction is the general contractor.
Google is known for the inventive design of its buildings. The buildings on the Kirkland campus include multiple micro-kitchens, nap caves and a large wooden nest. The South Lake Union complex will likely be no exception.
Vulcan, which is working with Graphite Design Group and Runberg Architecture Group, said the complex, called Lakefront Blocks, will include pedestrian throughways, public bike racks and outdoor courtyards.
“South Lake Union is a thriving hub, and we’re excited for our new space,” McQueen said.
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South Lake Union has been transformed over the past decade from an area of warehouses and surface parking lots to a hotbed of tech activity and accompanying towers, restaurants and bars.
The development of the neighborhood is often cited as an example of Seattle’s change — which some say brings economic prosperity while adding to income inequality.
Facebook is also expanding in the area. It signed a lease for 274,000 square feet at the new Dexter Station building, just northwest of the heart of Amazon’s buildings.
And Google will move in to its new digs just after travel website Expedia completes its move of 4,500 employees from Bellevue to its new waterfront campus in Seattle’s Interbay neighborhood, west of South Lake Union.
The tech office-space market is strong in the city, and doesn’t seem to be slowing down anytime soon.
“We just keep seeing a lot of growth, not only with tech companies that come out of the Bay Area but also Seattle-area companies,” said Oscar Oliveira, a managing director at Broderick Group in Seattle. “As long as the economy and the tech markets in general are positive, we will continue to see growth.”
2015 was the “most active year for development” since before the recession, according to commercial real-estate brokerage JLL, and several of the top deals involved tech tenants. South Lake Union was the second most active Seattle neighborhood, behind the downtown core.
“Seattle remains a bargain compared to many major tech hubs, such as San Francisco and New York,” JLL research manager Alex Muir said in a report about tech leasing. “Companies seeking intellectual capital will continue migrating to, and growing in, the market.”
Vulcan is a big contributor to the activity; the majority of the company’s projects are in South Lake Union. It still owns between 3 million and 4 million square feet of space it can develop in the neighborhood.
Vulcan will lease at market rates the 151 apartments in Lakefront Blocks, which will also have fitness centers and rooftop decks. The complex will have 812 parking spaces in garages below ground.
Vulcan said it will contribute $4.3 million in incentive zoning fees “for affordable housing and day care.”
Google’s Vulcan leases range from 14 to 16 years.