Google Closes $2.4 Billion Chelsea Market Deal to Expand New York Campus

The $2.4 billion sale of New York's Chelsea Market to Alphabet Inc's Google closed on Tuesday in a deal that will expand the company's presence in the city's technology corridor along the Hudson River.

The sale of the 1.19 million square foot complex that includes ground floor shopping and a food hall marks a coup for asset manager Jamestown LP, which acquired a 75 percent stake in the former Nabisco factory in 2003 for $280 million.

Jamestown bought out its partners in 2011 in a deal that valued the building at $795 million, according to media reports.

The building is adjacent to Google's New York headquarters at 111 Eighth Avenue, one of the city's largest buildings that it bought in 2010 for $1.77 billion. That building also was developed by Jamestown along with Taconic Partners.

The deal highlights New York as a hub for innovation and an incubator for young technology companies, said Michael Phillips, president of Jamestown. The sale was first reported in early February.

The sale also showcases a Manhattan real estate market that has not lost strength, said Doug Harmon, a broker at Cushman & Wakefield who represented Jamestown in the deal.

"People have been saying the cycle is long in the tooth," said Harmon, who also brokered the 2010 deal with Google.

Google also has leased space on Pier 57 jutting into the Hudson, which will create a four-block campus.

AFP- Google buys NYC's Chelsea Market building for $2.4 bn
Google on Tuesday bought up New York's Chelsea Market for $2.4 billion, finalizing its acquisition of the emblematic retail and food hall that stands opposite the internet giant's current headquarters in the city.

Google had already paid $1.7 billion for the building facing the market in 2010, which has 275,000 square metres of office floorspace.

It already has offices in the Chelsea Market building -- built in 1913 by architect Albert G. Zimmerman as a factory for the Nabisco biscuit company -- which serve as offices for the Google-owned online company Youtube.

Google bought the latest property from real estate developers Jamestown, which acquired the building in 2003 and will continue to manage the popular food court on the ground floor, Jamestown said in a statement.

The gourmet food hall houses dozens of restaurants and high-end food stands and in the last two decades has become a highlight of Chelsea and the Meatpacking District, its trendy neighbour.

The building sold for $280 million in 2003, and in 15 years its value has increased eightfold, reflecting the meteoric rise in the city's property prices. Tuesday's sale was one of the most expensive real estate transactions for a single building in New York's history.

The 110,000 square-meter property will be added to the 1932 building forming a hi-tech Google "campus" in the east coast city.

© Thomson Reuters 2018