Here’s what Google’s Hudson Square expansion means for the neighborhood
Tech giant will fuel development in an already growing part of the city, experts say
Some developers and brokers tried to call it Soho and Tribeca. But now, Hudson Square’s name might actually stick.
Google’s parent company Alphabet announced plans on Monday to invest $1 billion into a 1.7 million-square-foot Hudson Square campus for the tech giant. It marks the second massive investment in the neighborhood this year, and sources say the development will drive office and residential demand, and may even help the real estate community finally settle on a name for the area.
“It’ll be exciting to tell people you moved to Hudson Square,” said Jordan Sachs, a residential broker at Bold New York. “What’s Hudson Square? That’s a story that these renters are going to want to tell.”
The neighborhood, which is bounded by Canal and Varick streets, and stretches from the Hudson River to Varick Street, has already seen a flurry of development activity since its rezoning in 2013. But according to those in the real estate industry, Hudson Square has yet to transform into a live-work-play destination.
As a part of Google’s plan, the company will bring 7,000 employees — doubling its New York City workforce — to Oxford Properties Group’s redevelopment of the St. John’s Terminal at 550 Washington Street, Jack Resnick and Sons’ 315 Hudson Street and Trinity Real Estate’s 345 Hudson Street. And Disney, which paid $650 million for 4 Hudson Square a few months earlier, is bringing up to 1.2 million square feet of office space to the neighborhood to house its New York operations.
Cape Advisors managing partner David Kronman said that Google’s expansion should help transform the neighborhood into a 24-hour destination. His development firm — which is building the 170-unit condo tower Greenwich West at 110 Charlton Street — hasn’t seen an increase in sales since the announcement. But Kronman said interest has already been strong, and he expects to see more interest from Google employees soon enough.
“I think that at some point people that work for Google, work for Disney, will recognize that Hudson Square is a great neighborhood, and there’s value to being a few minutes’ walk from where they work,” he said. “I think we’ll start to see that, but I don’t know that I can say that we’ve seen it so far.”
Another luxury condo project nearby is 565 Broome Street, where here former Uber CEO Travis Kalanick bought a $37 million unit in November. Bizzi & Partners, Aronov Development and Halpern Real Estate are developing the 30-story condo.
Corcoran Group agent Todd Vitolo, who works in the neighborhood, said the firm was already seeing more interest in the neighborhood less than one week after Google’s announcement.
“We had five inquiries on Monday alone,” he said. “It’s not only buyers. I have two sellers in the neighborhood who I’ve been in touch with over the past year. They’ve both kind of resurfaced this week as well. People are really putting a lot of weight in the Google stamp of approval.”
If Cape Advisors decides to raise prices at Greenwich West, it will be because overall demand is strong and not because Google is coming to the neighborhood, Kronman said. He did not see the company transforming the neighborhood the way Amazon appears poised to transform Long Island City, if only because there is less physical room for growth.
“There’s more availability for development opportunity [in Queens],” he said, “so I think that you’re going to see some rush to that because there are sites available to be developed, whereas downtown at the crossroads of the West Village and Hudson Square, there’s not a whole lot.”
Brett Greenberg, executive managing director at Jack Resnick and Sons, echoed the point that Google’s expansion was good but not transformative news for the neighborhood. He did not see this as an example of a firm turning around a desolate part of the city but rather as a company making an already strong part of the city stronger.
“Having Google there, I think it will bring other firms, just the way it did to the Chelsea Market area over the last dozen years or so,” he said. (Earlier this year, Google bought the Chelsea Market building for $2.4 billion in debt-free deal.)
Greenberg has not noticed an increase in demand for office space yet but predicted that would happen next year. They currently have about 6,000 square feet of vacant space at 250 Hudson Street.
Google’s growth could also give more credence to establishing Hudson Square as the name for the neighborhood. Residential developers have not traditionally used that name because Hudson Square has not had much luxury product, according to Vitolo.
“I think the neighborhood was always trying to position itself as Soho West, which sounds like a more expensive neighborhood,” he said.
“I think the commercial guys like Trinity Church, who owns most of the neighborhood, coined the name Hudson Square for commercial leasing purposes,” Vitolo continued. “Hopefully, it’s on its way out.”
Bold’s Sachs said he saw property values increasing in the long term, at least partly because of Google, but maintained that they would not shoot up overnight.
“We can’t think they’re going to pick up immediately just because of the news,” he said.
Peter Von Der Ahe of Marcus & Millichap said the Google announcement combined with Amazon coming to Long Island City proves that New York City is a major participant in the growth of tech companies nationwide. He described Hudson Square is “already one of the hottest and highest rental market locations in the city,” and predicted that Google would only add to its popularity.
“This is already one of the areas that’s in the highest demand,” he said, “so it’s only going to make the demand greater.”