Google Set To Invest $9.5B On U.S. Offices And Data Centers This Year

Google says it plans to invest about $9.5B in U.S. offices and data centers this year, opening new facilities and expanding existing ones. The total is up from $7B in similar investments last year.

Over the past five years, the tech giant has invested more than $37B in offices and data centers in 26 states, it said. Last year, the company announced plans to buy the massive St. John’s Terminal office project on Manhattan’s West Side for $2.1B, doubling down on its office presence in New York City.

The company is also expanding its footprint in Washington, D.C., with a sublease of 130K SF at 655 New York Ave. NW, the Washington Business Journal reports, citing Transwestern data. That represents the largest office lease in the market during the first quarter of 2022.

“It might seem counterintuitive to step up our investment in physical offices even as we embrace more flexibility in how we work,” Alphabet and Google CEO Sundar Pichai wrote in a blog post announcing the investment totals. 

“Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities,” Pichai wrote, adding that the company will create about 12,000 new jobs this year.

This year's investment by Google in existing office properties includes those in Austin, Texas; Boulder, Colorado; Cambridge, Massachusetts; and Pittsburgh. The company plans to open a new office in Atlanta this year, while data center investments will be in Tennessee, Virginia and Oklahoma.

On the West Coast, Google has opened a new office in Downtown Portland and is making further investments in its data center in The Dalles, Oregon. The company is also investing in its Kirkland and Seattle campuses in Washington.

Google's investments coincide with a slow return to the office. Kastle Systems reports occupancy of 43.1% of pre-pandemic levels in the 10 metro office markets that it tracks nationwide for the week ended April 6, up 1.1 percentage points from the week before and the highest rate since March 2020. Austin continues to lead the way with 63% occupancy, according to Kastle. San Jose, California, had the lowest occupancy of the April 6 report at 33%.

Besides putting money into existing and new office space, Google has been scheduling events at its offices not typically associated with office life — at least not with office life before the pandemic. The thinking is that these events will make the return to work easier for employees no longer used to coming to an office.

Later this month, pop star Lizzo will perform for Google employees at a venue near the company’s HQ in Mountain View, California, The New York Times reports, and the company is planning pop-up events that will feature food and swag at other locations.