Rumored for weeks, the sale gives Google a permanent home in Manhattan’s Chelsea neighborhood.
First reported in October and again earlier this month, Google (GOOG) has finally closed on its biggest real estate purchase to date: the 111 8th Avenue building.
The 18-story Chelsea giant is almost 3 million square feet and covers an entire city block, between Eighth and Ninth avenues from 15th and 16th streets. It is listed as the third largest building in Manhattan by square footage.
The deal is reported to be the largest single-asset sale in the U.S. in 2010 and the largest-ever acquisition by a tenant/user.
As part of the deal, Google has retained Taconic Management Company to manage the current tenants in the building, which include advertising agency Deutch, Barnes and Noble (BKS), Nike (NKE), WebMD, Sprint (S) and Armani.
Google first came to 111 Eighth Avenue in 2006 and has expanded significantly. They are the largest tenant in the building, with more than 2,000 people employed in Chelsea.
“Google was attracted to the unique features of the building, including the full-block sized floorplates, the 14.5-foot ceiling heights, the views, the easy access to transportation, and the building’s technology offering,” said Paul Pariser, co-chief executive officer of Taconic Investment Partners. “This purchase represents the opportunity to continue the storied history of 111 Eighth Avenue — the building is in the hands of an owner with the vision and capital to continue 111 Eighth Avenue’s leading role in Chelsea and the Manhattan commercial market.”
Press release follows:
Taconic Investment Partners, Jamestown Properties and New York State Common Retirement Fund Sell 111 Eighth Avenue to Google Inc.
One of New York’s Largest Office Buildings Trades to Building’s Largest Tenant
New York – Today it was announced that one of New York’s largest office buildings, 111 Eighth Avenue, has been sold by a partnership of Taconic Investment Partners, Jamestown Properties and the New York State Common Retirement Fund to Google Inc. The terms and amount of the sale were undisclosed, though the deal is reported to be the largest single-asset sale in the entire U.S. in 2010 and the largest ever acquisition by a tenant/user.
“When we purchased the building 12 years ago, we recognized the remarkable potential that 111 Eighth Avenue offered—the opportunity to transform a building that occupies an entire city block with an incredible infrastructure into a class-A office building that would elevate Chelsea into an attractive class-A commercial office alternative to Midtown,” said Paul Pariser, co-chief executive officer of Taconic Investment Partners.
As part of the deal, Google has retained Taconic Management Company, a subsidiary of Taconic Investment Partners, to continue the leasing oversight services and management of the building on its behalf, providing the same level of customer service the building’s tenants have come to expect.
When 111 Eighth Avenue was acquired in January 1998, Taconic Investment Partners and its partners commenced a $68 million base-building renovation, overhauling vertical transportation, the lobbies, common corridors, power plants and delivery systems, transforming 111 Eighth Avenue into a leading, first-class office building. Taconic has led the building’s development, management and leasing efforts, replacing the original back-office and warehouse-type tenants with a variety of first-class tenants in media, advertising, fashion and technology. Today, 111 Eighth Avenue is the New York headquarters not only for Google, but also for Web MD, Nike, Deutsche Advertising, Lifetime TV, and Armani AX, among others.
Google first came to 111 Eighth Avenue in 2006 and has expanded significantly; they are the largest tenant in the building with more than 2,000 people employed within Chelsea.
“Google was attracted to the unique features of the building, including the full-block sized floorplates, the 14.5-foot ceiling heights, the views, the easy access to transportation, and the building’s technology offering,” said Pariser. “This purchase represents the opportunity to continue the storied history of 111 Eighth Avenue—the building is in the hands of an owner with the vision and capital to continue 111 Eighth Avenue’s leading role in Chelsea and the Manhattan commercial market.”
The sellers were represented by Doug Harmon of Eastdil Secured, while Howard Shapiro of Greenberg Taurig served as the legal counsel. Google was represented by CB Richard Ellis’ Stephen Siegel, William Shanahan and Darcy Stacom, and Robert Sorin of Fried Frank acted as Google’s legal counsel.
