— Bloomberg LP
The US’ finance capital is getting colonised by Silicon Valley. Google’s planned US$1 billion ($1.37 billion) expansion in New York will solidify its dominance as the city’s top big-tech office tenant — but only until Amazon.com arrives.
Google now ranks 12th by leased office space in Manhattan, with 1.8 million sq ft (167,225 sq m), including two agreements announced on Dec 17, according to Cushman & Wakefield. The company, a division of Alphabet, also signed a letter of intent to occupy about 1.3 million sq ft of space at 550 Washington Street, which would move it to sixth on the list, with 3.1 million sq ft, according to Bloomberg calculations.
“When the Googles of the world and the Amazons of the world announce decisions like that, other tech companies don’t necessarily pile on, but they notice that, ‘oh, this is a place to be’,” says Peter Muoio, chief economist at Ten-X Research, a unit of real estate firm Ten-X Commercial. “This really cements that it’s not really just a secondary kind of market, that it’s really becoming a tech capital.”
With 3.1 million sq ft in leased office space, Google will move from 12th to sixth on Manhattan’s list of top office tenants (Picture: Bloomberg)
Leading the list is co-working company WeWork Cos and finance industry stalwarts, including JPMorgan Chase & Co, Citigroup and Morgan Stanley, according to Cushman & Wakefield. Google’s latest investment helps cement its position as Manhattan’s largest bigtech office occupier.
Google said on Dec 17 that it reached lease agreements at 315 and 345 Hudson Street that would add about 400,000 sq ft. That, along with Washington Street, will create a campus called Google Hudson Square, the company said.
Even with the expansion, the total is still well behind Amazon, which plans to add as much as eight million sq ft of commercial space across the river in the Long Island City neighbourhood of Queens over 15 years. Apple also recently outlined its intention to grow in the Big Apple.
In addition to its leased space, Google also owns real estate and has made purchases that rank among the largest ever in Manhattan. In 2010, it bought 111 Eighth Avenue, its New York headquarters, for US$1.8 billion. Earlier this year, it paid US$2.4 billion for the nearby Chelsea Market.