Google to buy $2 billion Manhattan city block?October 27, 2010: 11:08 AM ET
A report today says that Google is in the final stages of acquiring the huge building which it currently rents in Chelsea.
The New York Post is reporting that Google is close to acquiring the 111 8th Ave. building it currently rents for approximately $2 billion. The 18-story Chelsea giant is almost three million square feet of space and covers an entire city block, between Eighth and Ninth avenues from 15th and 16th streets. It is listed as the third largest building in Manhattan by square footage.
Google (GOOG) currently only rents (550,000 square feet) a fifth of the building, the rest is taken by such high profile clients as Nike, Armani and advertising agency Deutsch.
It isn't certain what Google's long term plans are for the 111 8th Ave; whether it wants to be a Manhattan landlord or if it plans to grow out its New York presence to five times its current size.
Google also currently rents space across the street in the Chelsea Market.
The 111 8th Ave. building is currently owned by Taconic Investment Partners and Jamestown Properties and was purchased in 2004. The $690/sq. ft. price that Google is supposedly paying is less than half of what the building would have fetched pre-recession.
Although the building was built in 1932, it suits Google's connectivity interests well. It currently houses a Telx ISP facility, which makes it one of the most connected buildings in the world. It also has subterranean parking and subway access via the A, C and E line.