Google Endorses Need for Office Space with $2.1B NYC Investment
New York, NY, September 22, 2021-Google said it is buying a Manhattan office building for $2.1 billion, one of the clearest signals yet of big technology companies’ growing appetite for office space, even as these firms embrace remote work, reports the Wall Street Journal.
“The deal for the new building on Manhattan’s West Side is the most expensive sale of a single U.S. office building since the start of the pandemic-and one of the priciest in U.S. history, according to data company Real Capital Analytics.
“Google’s purchase of the 1.3 million-square-foot waterfront property is the latest sign that fears of the office building’s demise look overblown. Vacancy rates across the U.S. are well above pre-pandemic levels and office rents have tumbled. But in recent weeks there is evidence that cheaper space is luring back corporate tenants, which have been shrugging off delays in returning to the office because of the Delta variant and are planning for the years ahead.
“In Manhattan, office asking rents are down to where they were in 2017, but August leasing activity for Midtown was more than double the previous month, according to real-estate firm Colliers. French bank Crédit Agricole SA signed a new lease in Midtown, while swimwear maker Longevity Brands added space in the Garment District.
“Newer office buildings, meanwhile, are finding buyers again after a stretch last year when these properties mostly repelled investors. Towers with tenants committed to long-term leases have sold at high prices, in part because low interest rates make them look like attractive investments in comparison. In March, private-equity firm KKR & Co. paid $1.1 billion for a San Francisco office building leased to Dropbox Inc., the most expensive office sale in the city in more than a decade.”