Google and Australian developer pull out of San Francisco mixed-use housing project

Australian developer Lendlease announced Friday it is ending its development project in San Francisco, California, together with Google.

“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,” Lendlease wrote in a statement. “Lendlease and Google have enjoyed a productive and collaborative relationship in the San Francisco Bay area across the past four years.”

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This San Francisco Bay Project was meant to create 15,000 new units, among them condos, multifamily, and affordable units across four neighborhoods in the area, along with retail and community components. Google would have worked in some of the offices in the project. It was slated to begin construction in 2026 and finish in 2038.

Now, Lendlease will receive compensation “for value created through the entitlement and master planning process.” Initially, the project was valued to be worth $15 million.

In August, Lendlease paused another San Francisco-based project called Hayes Point, which was also a “47-story mixed use, live-work-play project,” according to its website. It was initially scheduled to be finished in 2027, but this was the estimated date before the pause.

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San Francisco’s real estate market has suffered, with the latest example being when the apartment complex for NEMA San Francisco‘s commercial mortgage-backed securities loan decreased for the second time. While the 2018 value was $543.6 million, the current loan is down 48% to $279 million.

Inbound moves to San Francisco have stagnated in the last couple of years, with a rate of 49.5%. In 2019, the rate was 54%, per the National Association of Realtors. California’s inbound moves did not outpace its outbound ones, as the state lost 0.3% of its population in 2022.