Google Buys NYC Building For $1.9 Billion

Google's NYC Offices

Google Thursday closed on a 15-story building in Manhattan for a reported $1.9 billion.

The new acquisition covers a New York City block, encompassing 2.94 million square feet of space -- bigger than the Empire State Building, according to the Los Angeles Times. The former Port Authority building at 111 Eighth Avenue, in Manhattan's Chelsea district, was sold by Taconic Investment Partners, Jamestown Properties, and the New York State Common Retirement Fund.

"Google's growth can now be organized without the normal Manhattan impediment of space constraints that often interfere with expansion plans," Douglas Harmon, the broker at Eastdil Secured, which represented the seller in the Google building purchase, told the Wall Street Journal.

Terms of the deal were not disclosed.

Google already has offices in the building, along with several large data centers. The company first established a Google Gotham office when it based one worker in a Starbucks office; today, 2,000 Google employees work in New York, primarily from its newly acquired office space, according to the Wall Street Journal. Google plans to continue growing in the region, tapping its proximity to financial and advertising customers and its distance from Silicon Valley competitors, the Wall Street Journal said.

"The tech scene is different here," Alan Warren, a Google engineering director in New York, told the Wall Street Journal. "We are a lot more connected to business users, as opposed to consumer business."

Of course, Google is not alone in its love of New York. Hot startups Foursquare and Hashable, among others, call Manhattan home. And Mayor Michael Bloomberg frequently has expounded upon his desire to encourage high-tech companies to relocate or open offices in this so-called Silicon Alley.

New York City's allure apparently is overcoming its reputation for high taxes and costly real estate. Within the past 12 months or so, Manhattan added 2,700 IT jobs, state labor statistics showed.