Google is in talks to buy into New York real estate in a massive way with the purchase of 111 Eighth Avenue, where it already leases approximately half a million square feet of space, according to a report in the New York Post. If it goes through at the reported $2 billion price tag, it’ll be a deal for the record books and a huge vote of confidence for the New York market.
“It shows a commitment to the city,” says John Cicero, managing principal of Miller Cicero, a commercial real estate consulting firm. “After a year of paralysis, there have been office building sales again, and at pretty healthy prices. But what kind of defines this, what kind of puts this on the radar is just the sheer size and the sheer dollars we’re talking about.”
Cicero says sales have hovered in the $400 to $500 per-square-foot mark in recent years. With 3 million square feet of space, 111 Eighth Avenue’s transaction would amount to nearly $700 per square foot.
One reason Google may be interested in ownership: more room to grow. The building, built in 1932 and renovated in 2002, is 99 percent leased at the moment. The so-called Googleplex East takes up an estimated 20 percent of the building (including the requisite cubicles, gaming area, and sushi station), but if the company owns the building, they can easily take over other sections of the structure as leases end, enlarging their footprint. Sort of like how Google has taken over the web.
Google’s big buy [NYP]
