Google on Tuesday confirmed it purchased Chelsea Market, a building at 75 Ninth Avenue, Manhattan, where it’s been leasing space since 2008. The move comes six weeks after original reports of the deal emerged, with Google disclosing its new real estate set it back $2.4 billion, with that figure even surpassing the price the company paid for 111 Eighth Avenue, its New York City headquarters acquired in 2010 for a reported $1.9 billion. The firm’s local HQ is just across the street from Chelsea Market which was fully owned by Jamestown Properties since 2011. Jamestown ended up making a significant profit on the real estate, having bought out its property partners for $225 million in 2011, whereas the site itself was redeveloped into what it is today in 1997 for “only” $10 million, which is how much its foreclosed mortgage debt cost.
Originally constructed in the late 19th century, Chelsea Market has a long history and once upon a time even housed the company credited with the creation of Oreo, the biscuit whose name ended up being attached to the official moniker of the latest stable iteration of Google’s operating system. The building spans 1.2 million square feet, meaning Google ended up paying $2,000 per square foot, a premium on the already expensive median price of $1,800 currently cited by numerous real estate services for properties in south Chelsea. The Alphabet-owned company said Jamestown will continue managing the food and retail hall in the building, adding that other tenants should experience “little or no impact” as a result of the move.
Chelsea Market presently houses the likes of Time Warner, Major League Baseball Advanced Media, and The Food Network. It’s still unclear whether Google will be interested in extending the leasing agreements of the current tenants once they’re close to running out. The move itself is understood to be indicative of the company’s growing need for space in the area. As a tenant, Google has been revising its lease agreement with Jamestown on an almost yearly basis since 2008 as it continuously asked for more Chelsea Market office space, according to previous reports. Since establishing its one-man New York City “office” in a Starbucks on 86th Street in 2000, Google grew its operations in the area to approximately 7,000 employees, the company said.