The Real Deal New York

Google closes on $2.4B 75 Ninth buy, but Jamestown is sticking around

Seller will hold onto Chelsea Market’s intellectual property
March 20, 2018 11:20AM

Google’s Sundar Pichai, Jamestown’s Michael Phillips and Chelsea Market at 75 Ninth Avenue

Google closed on its $2.4 billion purchase of the Chelsea Market building Tuesday, but seller Jamestown Properties is holding onto at least one important piece.

The investment manager is keeping the branding rights and intellectual property of the Chelsea Market name, and is looking to open offshoot locations, the Wall Street Journal reported.

Jamestown, with about $11.8 billion in assets under management, is checking out emerging neighborhoods in Europe and the United States and is looking to announce “at least one, perhaps two” new Chelsea Market spots by the end of the year, company president Michael Phillips told the Journal.

“The concept travels,” he said. “Our intention is to create this community of buildings.”

The company will continue to manage the Chelsea Market food hall, which draws about 6 million visitors a year.

Google earlier this year inked a contract to buy the 1.2 million-square-foot building at 75 Ninth Avenue, as The Real Deal first reported. The tech giant, which has a market cap of $800 billion, occupies at least 400,000 square feet at the property. The building also comes with an additional 300,000 square feet of development rights.

Jamestown bought a 75 percent stake in the building in 2003 and purchased the remaining ownership in 2011, spending a total of $790 million.

As TRD reported in its March issue, Jamestown received multiple unsolicited offers for the property over the past few years. Instead of focusing on a lease, Google’s conversations with Jamestown centered on an acquisition of the property, according to multiple sources.

At $2.4 billion, it is the second-priciest deal for a single building in New York City history. It also claims the highest price per square foot among city buildings that sold for $2 billion or more — an eye-popping $2,000. Google has paid at least $4 billion for New York City real estate in the last decade. [WSJ]Rich Bockmann