Google has purchased a $2.1 billion office on Manhattan’s West Side as it embraces a hybrid work due to the pandemic, the company announced on Tuesday.
Quoting Real Capital Analytics, the Wall Street Journal described the purchase as the largest real estate deal in the United States for an office building since the onset of the Covid-19 pandemic.
Caught in the challenges of Covid-19 restrictions, the tech giant is looking to move to a more flexible work space for its growing workforce, and New York, which holds its second-biggest office, becomes the destination of choice.
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“Google has been fortunate to call New York City home for more than 20 years, during which time we have grown to 12,000 employees,” the company said in a statement. “New York’s vitality, creativity and world-class talent are what keep us rooted here. It is why we’re announcing today that we are deepening our commitment to New York and intend to purchase the St. John’s Terminal in Manhattan for $2.1 billion, which will serve as the anchor of our new Hudson Square campus.”
Google sees the property purchase as key in giving back to New York, where it has recorded tremendous growth over the years. The web search giant also believes purchasing the St. John’s Terminal will give it the opportunity to increase its help to communities and organizations impacted by the pandemic.
“This space will provide new opportunities for us to engage with our community neighbors, and will include office space occupied by Google, a public food hall, community space, galleries, the city’s largest public rooftop space and educational and environmental programs run by the Hudson River Park Trust,” the company said.
Google had been leasing the St. John’s Terminal, a former freight transfer facility, purchasing it as part of the tech giant’s expansion of its 1.7 million-square-foot Hudson Square campus. The company said that the building will be “reimagined into a highly sustainable, adaptable and connected building.”
As a result of the new office space, Google will have the capacity to employ 14,000 workers in New York City in the future. The company said the decision to purchase St. John’s Terminal further builds upon its existing plans to “invest more than $250 million this year in our New York campus presence.”
In an era when the office work model has been greatly scuttled, Google and other big companies have had to make tough decisions allowing employees to work from home. Google said that it’s buying the building because in-person collaboration is an “important part of our future.” Google has recently postponed a full return to the office until 2022 and is giving employees the option of permanently working from anywhere if their role allows.
As CNN noted that though the pandemic has forced many to work from home, tech companies have been expanding their office facilities, Google’s purchase of the St. John’s Terminal does not come as a surprise. Facebook recently bought a previously unused corporate headquarters from outdoor retailer REI in Bellevue, Washington. Amazon has also been eying to expand in New York’s Hudson Yards, according to Bloomberg, while Apple has announced major expansion plans in various US cities.
The St. John’s Terminal transaction will close in the first quarter of 2022.