NEW YORK (NYTIMES) - Google on Tuesday announced it would spend US$2.1 billion (S$2.84 billion) to buy a sprawling Manhattan office building on the Hudson River waterfront, paying one of the largest purchase prices in recent years for an office building in the United States and providing a jolt of optimism to a New York City real estate industry lashed by the coronavirus pandemic and the shift to remote work.
The transaction comes during a precarious period for the city's office market, the largest in the country, as the swift embrace of hybrid work and the shedding of office space have presented the most serious threat to the industry in decades.
While Manhattan has a glut of office space available for lease, setting record highs during the pandemic, the four firms that make up so-called Big Tech - Amazon, Apple, Google and Facebook - have staked a bullish position on the future of New York.
The companies have rapidly grown their operations and workforce, one of the few bright spots for New York, which has been hit harder by the pandemic's economic toll than any other major American city.
Google was already leasing but not yet occupying the 1.3 million sq ft property, known as St. John's Terminal, a former freight terminal that is being renovated and expanded near the Holland Tunnel. The company has 12,000 corporate employees in New York City - its largest satellite office outside its California headquarters - and said on Tuesday it planned to hire another 2,000 workers in the city in the coming years.
Collectively, the four tech giants employ more than 20,000 people in their Manhattan offices. But their workers are unlikely to work five days a week in the office again any time soon. Many tech companies have said they will allow employees to work remotely in a hybrid arrangement even after the pandemic ends.
The speed with which the economy recovers in New York City, especially Manhattan, could hinge on its swath of office buildings, which before the pandemic attracted one million workers every day whose spending on everything from morning coffee to business lunches to after-work Broadway shows supported thousands of businesses.