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 purchase is the most expensive for any single U.S. office building since the pandemic’s inception, according to The Wall Street Journal, citing Real Capital Analytics. The Journal first reported the news of the deal.
Google already leases the building and said it would exercise an option to purchase the St. John’s Terminal building in the Hudson Square neighborhood of Manhattan. In a blog post, CFO Ruth Porat said the building would “serve as the anchor” of its new campus in the area.
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, like other tech businesses, has thrived during the pandemic, bringing in substantial revenue to invest in real estate and other initiatives. Consumers relied even more heavily on internet services during shutdowns, including for school, work, and entertainment.
The plans add to Google’s already-large 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 plans to open the St. John’s Terminal site at 550 Washington Street by mid-2023. The site will be Google’s largest office outside of California, according to CFO Ruth Porat. The campus will be about 1.7-million-square-feet and house Google’s sales and partnerships teams.
Analyst View
This is a huge and juicy real estate investment for Google and proof of a thriving company despite the pandemic in a period of economic slowdown. The choice of Manhattan also validates the ever attractiveness of the New York landscape for a behemoth Fintech like Google.
SOURCE:CNBC
