Alphabet’s Getting Into Commercial Real Estate Consulting, But Not To Throw Google’s Weight Around

One of the most powerful companies in the world has entered the commercial real estate services arena.

Courtesy Associate Capital

A depiction of Associate Capital’s recovery plan for the Potrero Power Station project in southeast San Francisco

Sidewalk Labs, a subsidiary of Google’s parent company Alphabet Inc., has launched a commercial development consulting business, the company said Tuesday morning. Led by Alison Novak, a former executive at New York-based apartment building The Hudson Cos., Sidewalk Urban Development announced its arrival by revealing its involvement in four underdeveloped projects across the country.

Sidewalk Labs is “fairly independent” of Alphabet, Novak told Bisnow, and Sidewalk Urban Development is full of people with a commercial real estate background, from investing to development to project management. The number of employees is between 25 and 30, but Alphabet expects to increase that number in the near future. Novak’s group is one of several within Sidewalk Labs, others focus on technological products that Sidewalk Urban Development can then turn around and use to support its customers.

“I’ve always viewed real estate and urban development as a collaborative industry, but Sidewalk Labs’ level of collaboration is similar to that of steroids,” Novak said.

Though the size of a parent company like Alphabet dwarfs even the largest commercial real estate services companies, Novak said their division isn’t necessarily looking to build an empire as popularly associated with sister company Google and its big tech competitors becomes.

“As the head of this division, I want to grow it in a really smart way,” said Novak. “It’s not so much about having a fixed framework for what we’re allowed to do, but rather about wanting to build a business that makes sense and fulfills our intended goal.”

The ambitions are significantly lower than Sidewalk Labs’ previous development push, when the company was selected as the master planner for a huge waterfront project in Toronto called Quayside in 2017. When Sidewalk released its 1,500-page plan in 2019, a representative of the country’s governing body complained that it was much larger than what was stated in the call for proposals, including a possible Canadian headquarters for Google.

Sidewalk also suggested in his proposal that he could serve as lead developer of the project – a proposal which, when combined with the more ambitious proposals, caused local officials to oppose the master plan.

Until the coronavirus pandemic reached Canada and Sidewalk pulled out of the project last May, there had been no construction progress in Quayside. Novak, who joined Sidewalk after Quayside was sunk, wasn’t going to close the door on her division to try its own development at some point.

“We’re really focusing on the consulting business right now,” said Novak. “We talked about it and have ideas for a possible joint development across the board. Overall, the mission is to accelerate the pace of change, so let’s figure out how to do that. “

Courtesy Sidewalk Labs

Alison Novak, Head of Sidewalk Urban Development

In San Francisco, Sidewalk is advising energy plans for Associate Capital in its 29-acre Potrero Power Station development district, which broke ground earlier this month on the site of a former power station on the city’s central waterfront. Associate has enlisted Sidewalk to support its attempt to complete the first major all-electric commercial project in the United States, Novak said.

In Miami, Sidewalk is working with Mana Common, the business of billionaire Moishe Mana, on a multi-phase commercial, convention and office complex in the Wynwood neighborhood. Sidewalk advises Mana, Miami’s largest private landowner, on organizing Mana Wynwood’s energy network and on traffic and waste management. The project uses the project management software Delve from Sidewalk Labs.

In Las Vegas, Sidewalk Labs is implementing its Pebble technology in Howard Hughes Corp’s Downtown Summerlin master plan development district. Pebble sensors monitor vehicle movement and density, and Sidewalk Urban Development will use the collected data to manage car traffic and parking, with the aim of reducing the number of parking spaces required for the project.

Outside of Portland, Oregon, developers Rabina Properties and New Blueprint Partners are using Sidewalk in the early stages of their planning to redevelop a former industrial park known as the Vancouver Innovation Center. The 180-acre site is essentially a blank slate, and Sidewalk is looking at how best to create a large-scale project with urban density and a modern focus on environmental sustainability and equitable growth.

These two motivations make up Sidewalk’s ethos of the partnerships it has and wants to form, Novak said. While it is easier to use technology to meet environmental goals than affordability and equity goals, the presence of a significant number of affordable housing units on the Potrero power plant project in San Francisco prompted Sidewalk’s decision to get involved. Sidewalk also seized the opportunity to infuse the entire Vancouver Innovation Center project with its ideals early on in the project.

“When we think about hiring developers, we ask them what their perspective is for what [equitable development] Funds for the project, ”said Novak. “I’m happy to work with developers who barely know what green building is, as long as they’re excited about pushing the boundaries of sustainability. I am also ready to work with companies that are making a positive contribution to the climate [projects]. “

Novak emphasized that she sees her group as an “addition” to a development process, not as one that can replace city planners, project managers and the like. Howard Hughes Corp. Howard Hughes President Jay Cross told Bisnow had already been working with architecture and landscaping firm Hart Howerton on the master plan for Downtown Summerlin when the Sidewalk Labs kicked in.

Courtesy Mana Common

A depiction of Mana Wynwood, a commercial development in the Wynwood neighborhood of Miami owned by real estate mogul Moishe Mana

“Urban planners have typically evolved from an architectural profession, and Sidewalk breaks new ground because they evolved from a technological background,” said Cross. “They approach the same problem from different perspectives and were therefore of interest to us.”

Sidewalk won’t be indebted to either its own technology or that of Google, Novak said. The company will suggest the use of third-party technology if necessary, a big reason it pays off as a consultancy rather than a proptech company focused on finding uses and selling its own products.

“It was and is a stigma that you have units on these projects that are isolated and fighting against each other,” said Dennis Palmer, chief operating officer of commercial project management and consulting firm Building Solutions. “We often encourage owners to call in specialists as needed. So if there was an advantage to having Sidewalk Labs on a project, we’d be the biggest advocates. “

The company is unlikely to become just a fish in the sea, though its focus remains as narrow as it is today – the association with Alphabet sure does.

“We hire various city planners to draw up master plans, work closely with local governments and major urban planning experts,” said Albert Berdellans, Vice President of Marketing and Communications at Mana Common. “But Sidewalk Labs is unique; it adds something to the process that will hopefully be revolutionary. “