Catch up on stories from the past week (and beyond) at the Slashdot story archive

 


Forgot your password?
Close
typodupeerror
×
Google Businesses Technology

Google Buys Manhattan Office/Telecom Hub 87

Posted by timothy from the imagine-that-in-pennies dept.
1sockchuck writes "Google will soon own one of the world's choice pieces of Internet real estate. The company has reportedly signed a contract to buy 111 8th Avenue in New York for an estimated $1.9 billion — or about $250 million more than Google spent to buy YouTube. The building serves as Google's main New York sales office, but is also one of the city's main telecom hotels, housing major data center operations for Digital Realty Trust, Equinix, Telx and dozens of network providers. Google currently has about 500,000 square feet of office space at 111 8th Avenue."
This discussion has been archived. No new comments can be posted.

Google Buys Manhattan Office/Telecom Hub More

Google Buys Manhattan Office/Telecom Hub

Comments Filter:
  • Haven't heard of real estate prices like this since pre-bubble Tokyo. What's going on here? Are a bunch of fiber cables really that valuable?
    • They're getting more than just a building. There are other tenants that they will get rent from, and that is figured into the price.

      • They're getting more than just a building

        They're getting exactly that: a building. Google is getting 100% return from it's add business, do you think they care about a 5% return from current tenants ?
        At about 700$/sq feet, they are buying an 80 year old building for the same price it would have take to build it from scratch at the height of the real-estate bubble.
        I can understand the're can be other reasons for wanting this, like preventing a competitor from buying it to disrupt their core business, and forcing local competitors to regroup elsewhe

        • Re: (Score:2)

          by AHuxley ( 892839 )
          Buying into a NSA ready telco hub saves a few billion.
          Buying a high frequency trading hub makes a few billion.
          U.S. intelligence agencies trying to fund a small war via insider trading, priceless.

        • Location. Building an 80 story building in Pigsknuckle, Arkansas might cost $700/ft^2, building it in Manhattan will cost a lot more that that. The piece of land it's on is incredibly valuable even if there were no building on it.

          • Re: (Score:2)

            by Reziac ( 43301 ) *

            And that's probably the point. At a certain level, many big corps are actually in the real estate business, NOT whatever nominal product. McDonald's leaps to mind... they're really in the primo location business, not the hamburger business.

    • It's a former bus terminal so the floors in that building are very tall. You're getting a lot of vertical space along with those 2.9 million square feet.

      • Re: (Score:3, Informative)

        by Anonymous Coward

        It's a former bus terminal so the floors in that building are very tall.

        It actually used to be a Port Authority freight warehouse - not a bus terminal. Freight was transported to it via sub-street-level canals which was loaded onto trucks and driven around the floors for deposit. If look at the walls of any of the airshafts you could notice that the floors are over a foot thick of steel-reinforced concrete. It's a tank of a building.

        • 111 Eighth also has a truck freight elevator, large enough to handle the largest step van . Tons of interconnected fiber throughout, meet-me-rooms every other floor, and just about every huge tele-media provider you can think of (Level 3, TelX, DRT, Deutch), once even Enron had an office back in the day.

          • Re: (Score:1)

            by Anonymous Coward

            That building is amazing. It covers a full city block. As I recall, the elevators and hallways can handle a 40' truck trailer.

    • Go price commercial or residential real estate in downtown Shanghai; it's more expensive than this price. Remember the saying in real estate: Location, Location, Location. This is a very desirable location in NYC - you're going to pay top-dollar for it, even in a real estate dip.

      •     There was a news story from September, that said they were trying to unload the building. It could have gone for anything. It was in Google's (and our) best interest, that it remain a carrier hotel.

    • Re: (Score:2)

      by DaveGod ( 703167 )

      Investment appraisal on the back of a napkin, in a rush (family are over) so apologies for mistakes:

      Initial investment: $1,900m;

      Assume required rate of return (profit): 15%;

      Assume 25 years of steady cash inflows;

      Assume residual value of building $500m after the 25 years;

      All figures before inflation (this is same as assuming cash flows move in line with inflation, so they net off).

      The 15% IRR is probably a bit low for Google, but then this is probably a relatively safe investment. 25 years is probably a bi

  • Black on slightly-less black is so easy to read.

  • not 100% (Score:3)

    by alphatel ( 1450715 ) * on Saturday December 04, 2010 @08:36AM (#34442938)
    And the deal still left a portion of the ownership in the original investors' hands, so Google only bought about 89% of the building.
  • I haven't read the details about this deal but some of these numbers are big because they buy things with their own Google company shares/stock which I believe are valued considerably above their yield. Google shares/stock are many multiple times higher in value than equivalent stocks with the same dividends/returns. That's why these figures are so massive...maybe? Is it a cash purchase? YouTube wasn't.

  • Solved their problems in the building (Score:3, Interesting)

    by Anonymous Coward on Saturday December 04, 2010 @08:57AM (#34443014)

    Google is hated in that building by the other tenants and has gotten a bad reputation with the management, so buying the building solves both problems. Looks like nobody's going to be saying NO to Google over at the Old Port Authority Building anymore.

    • Re: (Score:2)

      by Teun ( 17872 )
      Are you going to tell us here or should we head over to wikileaks?

    • Re: (Score:1)

      by Anonymous Coward

      I work in that building. Not for Google. I don't hate google.

      However, there was a company wide email sent on Friday where someone put in bold BOOOOOOOOOGLE while mentioning this news.

      Odds are we're leaving the building entirely in 2011

  • 5000 euros/m2 (Score:3, Informative)

    by ogrizzo ( 23524 ) <Ottavio,Rizzo&unimi,it> on Saturday December 04, 2010 @09:13AM (#34443066)
    For those using sensible units: 6800 USD/m2 or 5000 EUR/m2
    • That's very very very cheap !
      I mean there is no way you could buy ANY piece of real estate for less than 10 000 euros/m2 in Paris.
  • My first thought was it must involve high frequency trading.

  • That's puzzling. Why would Google need high-cost data center space in NYC? They're distributed enough that it doesn't matter. I could see Google buying an office building in Manhattan and filling it with advertising salespeople, but not much hardware needs to be there.

    Even for Wall Street, many of the big data centers are elsewhere, usually in New Jersey.

    • Maybe to be physically close to Wall Street computers.

      • Re: (Score:2)

        by pyite ( 140350 )

        Maybe to be physically close to Wall Street computers.

        Which, as mentioned, are all in New Jersey.

        ARCA: Weehawken, NJ (to be moved to Mahwah, NJ early next year)
        NYSE: Mahwah, NJ
        NASDAQ: Carteret, NJ
        ISE: Jersey City, NJ (to be moved to Secaucus, NJ early next year)
        Direct Edge: Secaucus, NJ
        CBOE C2: Secaucus, NJ

        111 8th is more important for the fiber going into it. It is the place you want to be if you're a telco.

  • Google bought a building that takes up an entire square city block - 15th - 16th streets, 8th - 9th Ave, in Manhattan. For $1.9B they could probably just write the word GOOGLE in REALLY big letters wrapped around the side of the building (that's only 1 1/2 letters per side) and write it off from their advertising budget.

  • Years ago my previous employer had equipment in two different datacenters in the building. Its more than real estate, or a massive datacenter. Its a very dense internet peering hub with datacenters and office space. I can definitely see this move as strategic, as it puts Google in the "middle" of all the different players.

  • With almost all of its revenue coming from internet ads, what kind of sales team does Google need in Manhattan that warrants $1.9 billion?

    • Those advertisements don't sell themselves. Google has a very large salesforce. Since NYC is the center of the universe for advertising (think "Madison Avenue") and magazine publishing (name just about any magazine) it is obvious that Google has a large salesforce there.

      Google already rents a large part of that building and has been quoted as saying there are at leaset 2000 employees there. It's cheaper to own then rent.

  • I just stopped working for Barnes&Noble.com and it was on the 9th floor of this building. BN is centralizing even more of the corporate into that building. Armani North America is in this building. Among other fancy upscale tenants. (all design and corporate for Armani, Armani exchange, etc. also freelanced there a while back) There are literally hundreds of big name companies there. its also a really culturally significant building for its New York history.

  • I worked in this building after WTC 9/11 attack. (Score:5, Informative)

    by JakFrost ( 139885 ) on Sunday December 05, 2010 @04:21AM (#34449376)

    I used to work in this building after the World Trade Center 9/11 attack when my company lost their data center and had to rent a co-location space in one of the data centers there. This is a monstrous building that is the size of an entire New York City block. It is build like an ancient Babylonia pyramid with vertical walls and a pyramidal structure on the top floors. It is across the street from the Chelsea Market and one block north of Homestead Steakhouse. The actual entrance for IT geeks to the data center space of this building is in the back on 9th avenue, the office entrance is in the front and I never used that one.

    I was bored one day I took a walk down the hallways of some of the floors and saw data center spaces for _all_ of the major telecom and Internet providers that I knew of and many that I didn't know even existed. Strangely some of the doors to these data centers were left open, I'm guessing because work was being performed there and I got a tour of some of these places. Miles and miles of conduits, cables, server cages, telecom equipment racks, server racks, backup units, power distribution units, massive uninterruptable power supplies, glycol-based water cooling pipes, and tons of galvanized steel green field conduits for power lines. This was also the first place where I saw companies replacing the problematic fingerprint based scanners for vain-pattern hand scanners to beef up security. I wish I had more time to check out this amazing building but I was so busy rebuilding our company's servers after WTC that I lived within 4-rows of racks for a few months.

    I spent my Christmas and New Years that year rebuilding 250 Compaq ProLiant and ~100 IBM xSeries for my old company to get their infrastructure and application servers back up. I pretty much lived in that building for 3-months and I was lucky to be able to easily walk over to the 14th St & 8th Ave L-train stop to go home late at night or in the morning. It was an interesting experience and I wished that I spent more time there to learn about that goes on in this building.

    If there was one place that I know of that is the hidden center of the Internet and Information in New York City I would think that this would be the building. Luckily it was build very solid and it is very nondescript so I think that it is pretty safe. There was a rumor that the FBI had their surveillance office across the street and they had floor space with network taps in that building to be connected to all the important information pathways in NYC.

    Data Center Power Off Button Incident

    This was also the place where the delivery guy who just finish dropping off more parts was walking out of the data center room and hit the red button on the wall, the door opened, and he walked out. Meanwhile all we heard was a very long and deep "ooooooooooooooooooooooommmmmmmmmmmmmmmmmmmmmmm" sound as every single piece of equipment turned off immedietelly after the Emergency Power Off button was pressed, including the magnetic locks on the door that the guy just walked out of. Surveilence tapes showed us what happened as we stood there in deafening silence and awe unable to comprehend what just happened. The next day there was a plastic box cover over that button.

    Who ever though it was a good idea to put the silver door open button next to the red power off button should have been flogged on the spot.

Slashdot Top Deals

After all is said and done, a hell of a lot more is said than done.

Close