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December 23, 2010 12:01 am
Google has acquired one of the largest office buildings in New York, cementing its position as one of the city’s most significant tenants.
The 15-storey building, 111 Eighth Avenue, occupies an entire square block between 15th and 16th streets in the Chelsea neighbourhood of Manhattan. Google has reportedly paid $1.8bn for the property, making it the company’s largest purchase of the year.
With fees, the deal will cost Google nearly $1.9bn, according to the New York Post, and will net New York state $7m in taxes and New York City $46.5m.
“We believe that this is a great real estate investment in a thriving neighbourhood and a fantastic city,” said David Radcliffe, Google’s vice president of real estate and workplace services.
The Silicon Valley search giant’s largest proposed acquisition of the year has been its $700m deal to buy travel company ITA. That deal is pending regulatory approval. Earlier this month, Google was in talks to buy Groupon, the local coupons site, for up to $6bn but that deal stalled.
Google has more than 2,000 employees in New York City, and has occupied part of the Eighth Avenue building since 2006.
“Like the city, our New York office is a melting pot of cultures and ideas – it’s home to Googlers from more than 35 countries who speak more than 40 languages,” said Mr Radcliffe. “They live in the five boroughs and spread across the tri-state area. We’re excited to continue to build our presence there.”
At more than 2.9m square feet, 111 Eighth Avenue has more office space than the Empire State Building. Other tenants include Lifetime Entertainment, BarnesandNoble.com and Nike USA.
The building was owned by Taconic Investment Partners, Jamestown Properties and the New York State Common Retirement Fund. Google has retained Taconic Management Company to handle leasing and management of the building.
The deal marks the culmination of a 10-year journey for Google through the strata of New York real estate. “Google New York started in a Starbucks on 86th Street with one person in 2000,” said Mr Radcliffe. “A scrappy, highly-caffeinated sales ‘team.’”
Mr Radcliffe added that today Google is hiring “across the board.”
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