From the March issue: If Google’s $2.4 billion buy of 75 Ninth Avenue last week from Jamestown Properties is any indication, the tech giant has started to piece together something of a second headquarters in Manhattan.
Between its monster $1.77 billion deal for 111 Eighth Avenue in 2010 and its lease deals at 85 10th Avenue and RXR Realty and Youngwoo & Associates’ upcoming Pier 57 project, Google has assembled a fiefdom that stretches along West 15th Street from Eighth Avenue out to the waterfront pier.
And it’s come a long way since it’s early dealings in the city.
Google inked its first Manhattan deal on Dec. 31, 1999, when it signed a lease at 1440 Broadway in Times Square. That office space grew to 170,000 square feet over the next six years, according to lease documents and news reports.
The space soon became too cramped for Google’s more than 500 employees, and the company’s executives looked to Midtown South. In 2005, they signed a lease for 300,000 square feet at 111 Eighth Avenue, a 2.9 million-square-foot, block-long office building then owned by Taconic Investment Partners, Jamestown and a state pension fund. At the time, sources told the New York Times that Google liked the location because the building sat on top of a major internet fiber-optic line.
While also planting a flag across the street at the Chelsea Market building in 2007, Google was determined to keep growing at the 18-story Eighth Avenue property. In what remains one of Google’s biggest real estate purchases worldwide, the company paid $1.77 billion for 111 Eighth Avenue in 2010.
Over the next several years, Google tried to muscle existing office tenants out of the building. The company failed to persuade Nike and advertising agency Deutsch to accept buyout offers in 2012. The tenants ended up staying until 2014 and 2015, respectively. WebMD accepted an undisclosed sum to vacate in 2015. Although Google owns the property, it’s unclear how much space it occupies in the building. One source said it has about 800,000 square feet.
It appears that Google’s growth strategy at 111 Eighth — years of steady leasing expansions accelerated by a monster purchase — is being mirrored across the street at Chelsea Market, sources said. When the company first moved in, it took 108,000 square feet of office space at the 1.2 million-square-foot property. Five years later, it sank its teeth into another 94,000 square feet.
As leases expired and tenants moved out, Google showed a level of hunger not even found in the building’s beloved ground-floor food hall.
By last year, the company’s turf had expanded to roughly one-third of the building at 75 Ninth Avenue, which is also home to Major League Baseball, the Food Network and NY1 News. Sources familiar with Google’s negotiations with the former building’s owner, Jamestown, said the tenant was looking for opportunities to grow its operation at the building while those other leases remained. Even before news broke last month that the tech giant was planning to buy the property, several of building’s office tenants began reducing their space. MLB, for example, will have fully relocated to Rockefeller Group’s 1271 Sixth Avenue by 2022.