(Reuters) – Australian developer Lendlease Group and Alphabet Inc’s Google have mutually agreed to terminate their development services agreements for four master-planned districts in the San Francisco Bay Area, according to a statement released by Lendlease on Friday.
Lendlease stated that the decision to end the agreements was a result of a comprehensive review conducted by Google on its real estate investments. It was determined by both organizations that the existing agreements were no longer mutually beneficial under the current market conditions.
In 2019, Lendlease was awarded a contract by Google to develop residential and retail space worth $15 billion in Sunnyvale, San Jose, and Mountain View. The project consisted of the development of up to 15 million square feet of residential, retail, and hospitality space, as well as associated amenities, while Google was tasked with developing office spaces.
Both Lendlease and Google have not provided specific details regarding the reasons behind the termination of the agreements. However, the decision is believed to be influenced by the changing real estate market conditions and the economic impact of the COVID-19 pandemic.
This announcement comes as a setback for Lendlease, as the company was set to play a significant role in the development of these master-planned districts. It remains to be seen how the termination of the agreements will affect Lendlease’s future plans and projects in the San Francisco Bay Area.
Himanshi Akhand reporting from Bengaluru for Reuters. The article has been edited by Sonia Cheema and Rashmi Aich.
