Google Dropping $2.1B To Buy Its Upcoming Manhattan Campus
Google is doubling down on office space in New York City, announcing it will spend billions buying the massive St. John’s Terminal office project on Manhattan’s West Side.
The company will pay $2.1B in a transaction that is set to close in the first quarter of next year, per a release from Oxford Properties. The Canadian pension fund-backed developer acquired the site in 2017 in a joint venture with Canada Pension Plan Investment Board. Oxford is leading the redevelopment of the 1.3M SF property for the tech giant into a brand-new campus, which will act as its New York City headquarters.
“Google's historic investment in New York City marks an enormous step for our recovery," Mayor Bill de Blasio said in a statement. "The purchase of St. John's Terminal will ensure New York remains a global leader in technology as well as a place that people are excited to live and work in.”
The Hudson Square building was constructed in 1934 and has track beds running through its second floor from its first life as a warehouse for storing unused train cars that ran along the original High Line railroad.
The purchase caps off several big-ticket purchases Google has made in recent years. In 2018, it bought the Chelsea Market building from Jamestown for $2.4B, the second-largest single-building transaction in city history, and the Milk Building at 450 West 15th St. the following year.
The St. John's Terminal purchase is the biggest single-building sale of the pandemic era, The Wall Street Journal reports, and will be hailed as a shot in the arm for both the investment sales market and the office ecosystem. Many have pointed to the tech firm's interest in physical office as proof the office will rebound — even amid a sluggish return to work.
It will also represent a major jump in investment sales volume. Only five Manhattan office buildings changed hands in the second quarter of the year, after four such transactions the previous quarter, according to Avison Young. The average price per SF was $1,039, up from the pandemic average but down 8.5% from Q2 2019's average of $1,135 per SF.