Google plans to buy New York office building for $2.1 billion
A person in a mask walks by the New York Google offices after they announced they will postpone their reopening in response to updated CDC guidelines during the outbreak of the coronavirus disease (COVID-19) in Manhattan, New York City, U.S., July 29, 2021.
Andrew Kelly | Reuters
Google plans to buy a New York City office building for $2.1 billion, even as most of its workforce remains remote, the company announced Tuesday.
The Wall Street Journal citing Real Capital Analytics reports that the purchase was the largest for any one U.S. office buildings since the start of the pandemic. The Journal first reported the news of the deal.
Google leases the property and indicated that it plans to exercise the option of purchasing the St. John’s Terminal Building in Manhattan’s Hudson Square. Ruth Porat, the CFO of Google said that the building will “serve the anchor” for its new campus.
The deal is a positive sign for New York as it emerges from the pandemic even as major employers including Google have postponed their return-to-office dates. Google has told employees they don’t need to return to the office until January. Its CEO previously said he expects 20% of employees to continue telecommuting after reopening.
Google and many other tech firms have thrived through the pandemic. They brought in significant revenue that they can use to invest in real property and other ventures. During shutdowns, consumers relied more on the internet for entertainment, school and work.
These plans will increase Google’s existing footprint in Manhattan. The company previously announced it would invest $250 million in New York City this year and expand its headcount in the area from 12,000 to 14,000 over the next few years.
Google expects the St. John’s Terminal to be open at 550 Washington Street between 2023 and 2024. Ruth Porat (CFO) said that the St. John’s Terminal site would be Google’s largest outside of California office. The campus will be about 1.7-million-square-feet and house Google’s sales and partnerships teams.
Google anticipates that the agreement will close within the first quarter 2022.