[ad_1]
Jubilation swept through the New York real estate world on Tuesday following Google’s announcement of plans to buy St. John’s massive West Houston Street terminal and the Hudson River for $ 2.1 billion. dollars early next year.
It has been hailed as the most expensive single-building purchase in the city since before the pandemic – but that’s even better news for the city’s slowly increasing office occupancy rate, according to the broker who handled the sale of the property to its current owners.
Douglas Harmon, the Cushman & Wakefield investment selling powerhouse, pointed out that the call option was built into Google’s lease three years ago with the owners of St. John’s, a landmark of the industrial age which is being converted into an advanced digital workplace. The Post first reported such an option in December 2018.
Google was not obligated to exercise its right to purchase despite the expectations that it would. By choosing to do so, she has made clear her commitment to extended and long-term office use, even though many employees continue to work from home.
The purchase expands Google’s burgeoning stronghold in Manhattan, where it already owns two smaller buildings in the Hudson Square area as well as the gigantic Chelsea Market and 111 Eighth Ave. in Chelsea.
Three years ago, Harmon also negotiated the sale of St. John’s to the current owners Oxford Properties and the Canada Pension Plan. That’s when the “real impact” of Google’s coming to the region arrived, he said. “Everyone said, ‘Wow, look at Google’, when he quickly rented the whole building.
In some ways, the purchase announced on Tuesday is now disappointing, he said. Google always had the option in its current lease to buy the property – and it was always likely the company would exercise it, Harmon said.
Still, it’s a good signal for the return-to-office movement, he said, as the local economy continues to slowly rise out of the depths of the pandemic.
“What is much clearer now is that it is a matter of time for everyone back to their offices. It’s about when, not if.
“There were questions about this six or nine months ago, but not anymore,” he said.
In fact, the occupancy rate of physical offices in Manhattan finally increased last week, from 19.5% to 28.1%, according to the widely-tracked Kastle Systems return to work barometer, which records visits from key cards to enter office buildings.
There is still a long way to go before the office towers are once again about to fill with people. But the 8.7-point lead was the biggest such increase since the pandemic mainly emptied Manhattan’s half-billion square feet of office space.
New York’s jump last week was the biggest in the Top 10 markets, followed by Kastle.
Like Facebook and Amazon, Google has said it will likely adopt a “hybrid” system to allow employees to work partly in the office and partly at home.
But Google clearly has no intention of leaving its total 3.1 million square feet of space in Manhattan – including St. John’s when it is ready for occupation in 2023 – to be used only for bars. espresso. The company announced this week that it would add 2,000 more employees to the city in addition to the 12,000 who already work there.
Mitchell Moss, professor of politics and planning at New York University, called the St. John’s agreement “the biggest vote of confidence New York City can get. It’s a signal to anyone with ambition that the city is well positioned for the 21st century and that the Lower West Side is New York’s intellectual center of gravity.
“Banks are [still] important, as are law firms and media companies, ”he said. “But there is only one Google.”
[ad_2]
Source link