NEW YORK CITY — Google has closed on its acquisition of 111 Eighth Avenue, an approximately 3 million-square-foot office building located in Manhattan's Chelsea neighborhood. While the acquisition price was not disclosed, reports earlier this month claimed the deal was worth more than $1.8 billion.
Google has occupied the 15-story building since 2006 and is its largest tenant. The seller, a joint venture between Taconic Investment Partners, Jamestown Properties and the New York State Common Retirement Fund, has spent the past several years seeking to attract more high-profile tenants. The joint venture purchased the building in January 1998 and completed a $68 million renovation that repositioned the space from its previous reputation for back-office and warehouse users. The current tenant roster also includes WebMD, Nike, Deutsche Advertising, Lifetime TV and Armani AX. The building was originally constructed 1932 by the Port Authority of New York and New Jersey.
According to local reports, the sellers originally put the building up for auction in September, and Google quickly entered into exclusive negotiations to purchase it, with a purchase agreement being signed earlier this month. Taconic Investment's subsidiary, Taconic Management Co., will remain on board to manage the property for Google.
“Google New York started in a Starbucks on 86th Street with one person in 2000 — a scrappy, highly caffeinated sales 'team,'” said David Ratcliffe, vice president of real estate and workplace solutions, in an entry posted on Google's company blog. “Now, we have more than 2,000 Googlers working on a variety of projects in both sales and engineering.” While details about Google's future for the building were not disclosed, several reports indicate that the building could be used for future expansion by the tech giant.
Doug Harmon of Eastdil Secured represented the sellers in the deal, with Howard Shapiro of Greenberg Traurig providing legal counsel. The CB Richard Ellis team of Stephen Siegel, William Shanahan and Darcy Stacom represented Google. Robert Sorin of Fried Frank served as Google's lead counsel.
“Google was attracted to the unique features of the building including the full-block sized floorplates, the 14.5-foot ceiling heights, the view, the easy access to transportation and the building's technology offerings,” said Paul Pariser, co-CEO of Taconic, in a statement. “This purchase represents an opportunity to continue the stories history of 111 Eighth Avenue — the building is in the hands of an owner with the vision and capital to continue 111 Eighth Avenue's leading role in Chelsea and the Manhattan commercial market.”
— Coleman Wood