Google to purchase extra workplace area in NYC as huge tech swoops down on actual property

Sept 21 (Reuters) – Google plans to purchase an workplace constructing in Manhattan for $2.1 billion, because the Alphabet Inc-owned (GOOGL.O) search engine big joins fellow expertise firms in investing in prime actual property, at the same time as hybrid work fashions develop into widespread.

The deal for St. John’s Terminal web site in New York Metropolis, which Google presently leases, will full within the first quarter of subsequent yr, Chief Monetary Officer Ruth Porat mentioned in a weblog put up on Tuesday. The area is anticipated to open by mid-2023.

Tech giants, with billions of {dollars} in money reserves, have been profiting from decrease workplace constructing costs throughout cities in america. Inc’s (AMZN.O) $978 million buy of the Lord & Taylor constructing on Fifth Avenue final yr and Fb Inc’s (FB.O) leasing of the Farley Constructing throughout from Madison Sq. Backyard are seen as prime examples for Manhattan’s actual property prospects.

A emblem is seen on the New York Google workplaces. New York Metropolis, U.S., July 29, 2021. REUTERS/Andrew Kell

Tech was the highest business for the second straight yr in Manhattan leasing exercise, brokerage CBRE Group Inc (CBRE.N) mentioned in January this yr. learn extra

Whereas Large Tech is rising its footprint, others are vacating workplace areas as pandemic-led distant working has prompted firms to reassess the necessity for actual property.

Monetary corporations, together with JPMorgan Chase & Co (JPM.N), had been seeking to sublet huge blocks of workplace area in Manhattan, in response to media studies from earlier this yr.

Google’s newest funding “builds upon our present plans to take a position greater than $250 million this yr in our New York campus presence,” Porat mentioned.

The funding comes at a time when most of its staff are working remotely and it has prolonged its voluntary return-to-office coverage by means of January. learn extra

Reporting by Akanksha Rana in Bengaluru; Enhancing by Shinjini Ganguli

Our Requirements: The Thomson Reuters Belief Ideas.

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