US$15 billion San Francisco Bay Project cancelled
06 November 2023
Multinational construction and real estate company Lendlease and Google have announced the cancellation of the US$15 billion San Francisco Bay Project in the US.
The project was expected to commence construction in 2026.
Lendlease issued a statement confirming the news, saying that, “The decision to end these agreements followed a comprehensive review by Google of its real estate investments, and a determination by both organisations that the existing agreements are no longer mutually beneficial given current market conditions.”
The companies announced their original plans in 2019. The project called for 15 million square feet of residential, retail, hospitality and other projects in the San Francisco Bay Area, with Google overseeing the development of its own office space.
However, the outbreak of the Covid-19 pandemic severely impacted global real estate markets and fundamentally changed the outlook for office developments, with demand not yet anywhere near its pre-Covid high. Inflation also means that the prices for construction materials have significantly increased since the plans were announced in 2019.
Earlier this year, Lendlease paused its 47-storey Hayes Point project in central San Francisco, reported to be its largest investment in the Americas.