The US-based technology giant, Google plans to buy an office building in Manhattan for $2.1 billion, as the company moves towards a more hybrid approach to work in the post-COVID era.
The Alphabet-owned company will purchase the St. John’s Terminal site in Manhattan, which will serve as the anchor of its new Hudson Square campus. The current move is also in line with the technology giant’s aim to join its fellow competitors in investing in the prime real estate market.
The St. John’s Terminal site at 550 Washington Street, which Google currently leases and expects to open by mid-2023, will be the company’s largest office outside California. The financial transaction is projected to close in the first quarter of 2022.
“As Google moves towards a more flexible hybrid approach to work, coming together in person to collaborate and build community will remain an important part of our future. It is why we continue investing in our offices around the world,” Ms. Ruth Porat, Google’s chief financial officer stated.
Tech giants, with billions of dollars in cash reserves, have been taking advantage of lower office building prices across cities in the US. Last year, Amazon purchased the Lord & Taylor building on Fifth Avenue for $978 million and Facebook leased the Farley Building across Madison Square Garden.
According to data firm Real Capital Analytics, the deal for the new building on Manhattan’s West Side is the most expensive sale of a single US office building since the start of the pandemic and one of the most expensive in the country’s history.
Technology was the top industry for the second straight year in Manhattan’s leasing activity, brokerage CBRE Group said earlier this year. While big technology firms are growing their footprint, others are vacating office spaces as pandemic-led remote working has prompted companies to reassess the need for real estate.
“Google’s latest investment builds upon our existing plans to invest more than $250 million this year in our New York campus presence,” Ms. Porat further added.
