Google Drops $2.1 Billion on an Office Building

Google said Tuesday that it intends to buy a New York City office building for $2.1 billion, or about the cost of a two-bedroom apartment in Manhattan.

It's great news for anyone who misses going into work. While most Google employees are still stationed at home until early 2022, the purchase signals that one of the world's most remote-friendly major corporations is eyeing a return to life where awkward cubicle exchanges are once again possible.

New Silicon City

Google already calls the St. John's Terminal building on Manhattan's West Side home, but it's a tenant. Once the first quarter of 2022 begins, it plans to exercise a buy option and the $2.1 billion price tag will make this the priciest U.S. office building sale since the pandemic began.

In June, Google's parent company Alphabet reported that it owned $55.9 billion worth of land and buildings around the world and, within that property empire, Google has quietly become one of New York's biggest commercial owners:

• At 1.7 million square feet, the St. John's Terminal building will play home to Google's sales and partnerships teams. It will be the company's largest office outside of California.
• Google already owns the nearby Chelsea Market building, which it paid $2.4 billion for in 2018, and 111 Eighth Avenue and the Milk Building at 450 W. 15th St. The company plans to up its headcount in the city from 12,000 to 14,000 in the next few years.

Not Like the Others: Google has more than $7 billion earmarked for U.S. office and data center investments this year. That sets it apart from the rest of corporate America, which has dumped office space during the pandemic: at 2020's end, 137 million square feet of office space was available for sublease, the most since 2003 and a 40% annual increase.

Those who do come back to Google's offices will have plenty of room to mingle: the company still expects 20% of staff to stay remote for good.