new York Google is writing New York real estate history for the second time: Although the city’s offices are still largely empty, the Internet giant has secured the former St John’s freight terminal in Manhattan for 2.1 billion dollars. It’s the biggest real estate deal in New York since the pandemic began and the biggest since the last record, when Google also paid $ 2.4 billion for the historic Chelsea Market. The sellers are two Canadian companies: real estate firm Oxford Properties Group and pension fund manager CPP Investments.
With this, the internet company shows that it continues to believe in the future of offices and that of New York despite remote working. Not least because many employees do not want to work in the homogeneous Silicon Valley, Google and Co. are expanding their presence in the metropolis. “New York City is the place for world-class talent, and the Google purchase of 550 Washington Street in Manhattan for its workforce proves it,” said Manhattan President Gale Brewer.
The big technology groups have recently been the bravest players in the New York office property market. While most businesses and hundreds of thousands of residents left the city at the height of the pandemic in 2020 and Manhattan became a ghost town, Big Tech has secured the office bargains on the Hudson. Facebook, Amazon or Google – they are all using the crisis to expand their office space in Manhattan.
Facebook rented almost the entire former post office building in New York. Apple secures the former Macy’s headquarters. Amazon is spending a billion dollars on a building on 5th Avenue. And Google just increased the announced $ 250 million real estate investment to more than two billion.
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Google is already a tenant in the St John’s building and has now announced that it will exercise its option to purchase it in the first quarter of 2022. The 120,000-square-foot building is on Washington Street in the west of the city near Chelsea Market, where Google’s New York headquarters are located.
The real estate-hungry tech corporations have helped to absorb some of the oversupply in the New York office property market that banks have left behind. After all, houses like JP Morgan and HSBC have significantly reduced their office space in the pandemic because they expect many employees to work from home at least temporarily in the future. The tech companies do not urgently need the many new offices. The West Coast corporations have postponed their return to the office until next year. But they plan for the future, and the focus should be on working together in the office again.
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