SAN FRANCISCO (MarketWatch) -- Google Inc. said late Wednesday that it plans to develop up to 1 million square feet of office space at the nearby NASA Ames Research Center, as the company looks to expand its facilities to house a burgeoning workforce.

Google and the NASA facility, both based in Mountain View, Calif., also will cooperate on several technical research projects, including large-scale data management, massively distributed computing and encouragement of the entrepreneurial space industry, according to a joint statement.

A development of the size discussed could house about 5,000 employees, said Brad Martin, a commercial real-estate broker at Cushman & Wakefield of California. Martin also said that the development could cost Google about $200 to $300 a square foot, or $200 million to $300 million, and take as long as two years to build.

NASA Ames Research Center Director Scott Hubbard and Google Chief Executive Eric Schmidt held a news conference late Wednesday to discuss details of the plan.

Schmidt said Google doesn't have any cost estimates and the Ames project "will take years" to complete.

He said Google hopes its technology will help NASA develop another moon-landing mission in the next 15 years.

Speculation about Google's real-estate hunt to house its ever-growing army of staff and engineers has been growing over the past month.

Google GOOG, -0.07% is beefing up its ranks as it takes on larger rivals such as Yahoo Inc. YHOO and Microsoft Corp. MSFT, -0.91% in the market for online search and other Internet services.

In the second quarter, Google added 701 employees and now employs more than 4,180 workers. Also, the company said that capital expenditures grew to $158 million in the second quarter from $142 million, primarily reflecting global infrastructure and real estate.

While a million-square-foot campus is large, there are a number of large corporate campuses in Silicon Valley. Cisco Systems Inc.'s CSCO, +0.01% north San Jose, Calif., campus takes up more than 5 million square feet.

Martin and other real-estate brokers and developers are excited about the prospects.

"I think it's positive for the economy and the markets," said Philip Mahoney, an executive vice president at Santa-Clara, Calif.-based C&C Commercial, the largest commercial real-estate brokerage firm in Northern California. "It's nice to see local companies doing well."

Mahoney added that due to the dot-com implosion, about 100 million square feet went vacant in the San Francisco Bay Area. Vacancy rates hit a high of 35% in the first quarter of 2002. Today, they stand between 15% and 20%.

"It was only last year that some people were dancing around Silicon Valley's grave," said Mark Conroe, president of Conroe Ventures, a real-estate development company based in San Francisco. "Well, the Valley is alive and well, with this being just one of the signs."