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By Eliot Brown 

Apple Inc., Google parent Alphabet Inc. and several car makers are seeking large expanses of real estate in the San Francisco Bay Area for their autonomous-car operations, a top landlord in the area said Thursday, illustrating Silicon Valley's growing importance in the auto industry.

Victor Coleman, chief executive of Hudson Pacific Properties Inc., told analysts that "we are seeing a definitive movement" from autonomous-car research-and-development facilities, which "seem to be a hot demand item."

"We're seeing the Toyotas of the world, the Teslas of the world, BMWs, Mercedes. Ford now is out in the marketplace looking for space," he said on the landlord's quarterly investor call. "I haven't even mentioned the 400,000 square feet that Google's looking to take down and the 800,000 square feet that Apple's looking to take down for their autonomous cars as well."

Such spaces would be large, but car factories tend to be much larger. Tesla's auto-making plant in nearby Fremont, Calif., is about 5.3 million square feet. Apple's new under-construction headquarters is about 2.8 million square feet, while Google's headquarters are about 4.8 million square feet. Both companies lease millions of additional square feet nearby.

Apple declined to comment. Alphabet representatives did not immediately respond to requests for comment.

Hudson Pacific is one of the largest landlords in the area, with offices throughout Silicon Valley and San Francisco, where its buildings are home to the headquarters of Square Inc. and Uber Technologies Inc.

The remarks on driverless cars came as Mr. Coleman was seeking to explain that demand is still strong in Silicon Valley despite concerns about the health of the tech sector. Earlier in the call, he said growth in San Francisco was moderating -- a shift in tone that worried some analysts on the call given that tech companies account for a large chunk of the company's income.

Alphabet has been quite public about its driverless-car ambitions, but Apple has been far more tight-lipped. Apple is in the process of expanding a team that had about 600 employees last year, according to people familiar with the matter.

--Daisuke Wakabayashi contributed to this article.

Write to Eliot Brown at eliot.brown@wsj.com

(END) Dow Jones Newswires

May 05, 2016 20:19 ET (00:19 GMT)

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