The transaction comes during a precarious period for New York City’s office market, the largest in the country, as the swift embrace of remote work and the shedding of office space have presented the most serious threat to the industry in decades.
While Manhattan has a glut of office space available for lease, setting record vacancy levels during the pandemic, the four firms that make up so-called Big Tech — Amazon, Apple, Google and Facebook — have staked a bullish position on the future of New York.
Google was already leasing but not yet occupying the 1.3 million-square-foot property, a former freight terminal near the Holland Tunnel known as St. John’s Terminal that is being renovated and expanded. The company has 12,000 corporate employees in New York City — its largest satellite offices outside its California headquarters — and said on Tuesday that it planned to hire another 2,000 workers in the city in the coming years.
“New York’s energy, creativity and world-class talent are what keep us rooted here and why we’re deepening our commitment with plans to purchase St. John’s Terminal,” said Ruth Porat, the chief financial officer at Google and its parent company, Alphabet. “We look forward to continuing to grow along with this remarkable, diverse city.”
In recent years, Google’s main rivals, notably Amazon and Facebook, have also invested heavily in New York City, turning a swath of the West Side, from Midtown to Lower Manhattan, into a thriving tech corridor.
Facebook has acquired more than 2.2 million square feet of office space in Manhattan, most of it signed just before or during the pandemic, and has 4,000 employees in the city. Amazon, whose corporate offices are largely clustered near its competitors on the West Side of Manhattan, also bought the former Lord & Taylor building on Fifth Avenue for $1.5 billion in March 2020.