Google Building East Coast Tech Mecca? NYC Office Building Bought for $1.9 Billion
It’s official: Google’s NYC office, located in the historic Port Authority HQ in the ‘meatpacking’ district of New York will be bought for $1.9 billion. The purchase is notable as the building is huge, an entire avenue wide – of which Google currently occupies only a few floors, so many have speculated that Google is betting on the New York property market.
However, there’s a deeper, more interesting, story that I have been covertly investigating but unfortunately turned up a lot of blanks. Clearly I am not intrepid enough. Nonethless, Wall Street Journal have just confirmed our suspicions.
We have heard rumors that this building sits on top of one of the biggest ‘dark fiber’ hubs in New York, with key parts of the telecommunications infrastructure of the city passing under the building. In our own discussion with members of the New York Commissioner’s Office, we were told that we it was not possible to confirm which companies were licensing that particular section of dark fiber, and that companies were not obliged to declare what sections of dark fiber they were managing.
However Wall Street Journal spoke with Goldman Sachs analyst, James Mitchell, who confirmed our suspicions that Google had other reasons that simply financing to buy that particular building:
“Because it was originally the Port Authority headquarters, 111 Eighth Avenue’s infrastructure is unusually suitable for data centers. The building is the third largest in New York City and sits on top of a fiber highway. About a quarter of the building’s tenants are data center tenants, such as Digital Realty Trust, Equinix, and Telx. We assume that Google may add its own servers in the building.
Mitchell writes that net operating income at the building is roughly $100 million a year. And with Google sitting on a huge cash pile that’s earning a pittance that income doesn’t look too shabby. Still, Mitchell stresses that he views “this financial benefit as less important than the strategic benefit,” of the New York building.
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Can we call it the second GooglePlex yet? It’s too early to say, as Google may just be a broadband provider for the moment – but we suspect they have much bigger plans than that. New York, is after all the finance and entertainment center of the USA. And last time they bought an entertainment center, like Youtube, they only paid $1.65 billion.
Either way, it’s worth hoping for an invite to the cafeteria for the renowned free lunch, to get one of the best views of New York city ever.