20 ms·

Google is buying Chelsea Market building for over $2B

358 points by uptown 9y ago

fancyfacebook 9y ago
Google has largely ruined Boulder, CO after building a huge new sprawling thing and effectively dictating to locals and politicians exactly how they want the neighborhood and city to be structured going forward. Everyone who isn't a googler hates them and wishes we hadn't allowed that, much less given them massive amounts of corporate welfare. Resist googlers if you can, they destroy communities.
- airstrike 9y ago
  Fearmongering much?
  - toomuchtodo 9y ago
    SFBA, Seattle, Major Colorado Metros, Austin, Nashville, Cambridge/Boston, Raleigh-Durham. That's not fear. That's pattern recognition. > Fast-growing technology sector is fueling a housing boom in cities across America https://www.washingtonpost.com/realestate/fast-growing-technology-sector-is-fueling-a-housing-boom-in-cities-across-america/2017/01/26/5c72c276-a5d8-11e6-8042-f4d111c862d1_story.html https://www.washingtonpost.com/realestate/fast-growing-techn...
    - ryanwaggoner 9y ago
      Places that have gotten expensive because they've become desirable places to live and convinced lots of people to move there? The horror! The only real problem here is shitty local governance and NIMBYism that refuses to acknowledge reality and build more housing. In the end, it doesn't stop people from moving there, it just drives up costs and drives out natives and people lower on the socioeconomic ladder. If you want affordable housing markets, you have to build housing in response to demand. Regardless, we're talking about NYC here, so the fact that Google is buying some building instead of leasing like they have been is a total non-story. It'll have zero effect on NYC.
      - toomuchtodo 9y ago
        They've only become desirable because of an influx of tech employers. Ergo, it makes sense for non-tech employed citizens to not want those employers to locate there (or expand). Also, existing citizens who own and live in these locations take priority over people who want to move in. No one is entitled to additional housing when tech companies foist externalities of additional workers (workers who could work remotely!) on a geographic region.
        RangerScience 9y ago
        > existing citizens who own and live in these locations take priority Yep, wealthy land owners, clearly the group that needs protecting. Actually, can anyone name a major US city where most of the growth came from itself, rather than an influx?
        toomuchtodo 9y ago
        > Yep, wealthy land owners, clearly the group that needs protecting. Wealthy land owners = citizens who have most of their personal wealth/retirements savings tied up in the equity of their home that has slowly appreciated over years or decades. How terribly different than tech companies and employees using copyright (source code) and vast quantities of data to reap enormous returns and salaries (respectively). This isn't David vs Goliath. This is New Boss vs Old Boss. Big Tech needs to get over itself. It's the new bad guy.
        davidcbc 9y ago
        So NYC aside, what is your answer for cities? How does a city improve itself without bringing in new jobs and tax revenue? Should a city just let buildings sit there and rot instead of selling them to a company that wants to create hundreds or thousands of jobs?
        toomuchtodo 9y ago
        No tax credits for businesses (See: Amazon). You pay a tax per head of employee you intend to employee onsite that covers infrastructure and subsidizing affordable housing. If you're a going concern, affordability should not be an issue. Otherwise, you're straining infrastructure and housing with marginal benefits to the host city. Hire remote instead.
- finkin1 9y ago
  I live in Boulder and don't share this sentiment whatsoever. Google already has a large campus here and they're expanding into an area that frankly needed to be renovated anyway. Their entire new + old complex is supposed to house ~2,000 employees. If adding 1.5k employees and a new building is "largely ruining Boulder" in your eyes you should see a doctor.
  - eternalcode 9y ago
    I would suggest seeing a Geologist perhaps. Get it? Boulder? Geologist?
  - hueving 9y ago
    >If adding 1.5k employees and a new building is "largely ruining Boulder" in your eyes you should see a doctor. Put some effort into understanding perspectives before resorting to derision. Bringing thousands of highly paid employees into a smaller city is often not good for many who already lives there unless they own property. The majority of the new jobs will not go to existing residents, rents will increase, restaurants will get more expensive, traffic will get worse, and everything will get more crowded. For rich city-dwellers, the above might sound like nothing, but for people who seek smaller cities it will suck because it quickly erodes the character of the city.
    - finkin1 9y ago
      I appreciate you trying to make OP's case, and I'm genuinely interested in changing my mind about this. What do you think should be done? Should growing companies be prevented from expanding because it might 'erode the character of the city'? I'm not in favor of the city subsidizing a company's growth, even if it does stimulate the economy in the long-run, but I just can't get behind any policy that would prevent a growing company due to something as nebulous as the erosion of the city's character.
      - stale2002 9y ago
        What should be done is that cities should relax zoning laws, and allow more housing to be built in high demand areas. That way the city can fit everyone, cheaply.
- stevenleeg 9y ago
  New York is a much larger city than Boulder. I'd assume Google would have a much tougher time trying to tell the NYC government how to operate considering how small their presence is relative to the city, even if we're just talking about Manhattan.
  - danharaj 9y ago
    I find the tech scene in NYC to be a lot more tolerable than other places. It seems like many of us here understand that we're small fish compared to, say, the sharks on Wall Street.
    - ionforce 9y ago
      An interesting thing to note about tech in NYC is that it's not at all like tech in the west coast where it's tech for tech's sake. In NYC it's always in support of some other industry. Definitely gives off a different vibe.
      - hueving 9y ago
        Yeah, unfortunately it puts you lower on the totem pole as a software engineer. This results in lower salaries in general for developers there compared to the bay.
- umanwizard 9y ago
  You don't have a clue about New York.
- jsky_goog 9y ago
  The new office has been open for 3 months and Google has had a presence in Boulder for a decade. Google is pretty far from "dictating...how they want want the neighborhood and city to be structured". The city council has promoted low growth and high housing prices for decades and will continue to do so.
- geofft 9y ago
  The real answer is for cities to be built up so much that even a Google-sized company is a drop in the bucket. Google NYC right now is about one city block (111 8th), expanding to two. That's a tiny part of Manhattan, which isn't even all of NYC. My old church is located under the old Citigroup Center skyscraper at 601 Lexington, which is also an entire block; Citigroup used to have both that building and the block across the street, 399 Park, for a couple of decades. When they moved out of those buildings to another neighborhood in Manhattan, that caused a drop in noon mass attendance but that was really about it. Their presence didn't destroy the neighborhood, let alone the city, and their move didn't destroy it either. The fact that NYC is capable of handling Citigroup-sized companies and Google-sized companies moving in and barely even noticing is one of the deep reasons I like living in NYC. I wish more other cities would do the same, because I don't think there's anything unique to NYC about the ability to do this. Maybe population - although the Denver-Aurora-Bolder metropolitan area, at 3M, isn't that much smaller than NYC (8.5M). The internet is telling me the Google Boulder office can support up to 1,500 employees. You shouldn't give them corporate welfare, but also you should just be able to accommodate them without that, they're not that big. It should just be a building, and you should have lots of those.
  - workthrowaway27 9y ago
    NYC metro area population is ~21M. It's way more dense than Colorado, so it's not surprising that a large company moving into NYC doesn't change it much.
  - blackguardx 9y ago
    Boulder has a population of ~100,000. I don't oppose the Google office, but their workforce will grow to represent 1-2% of the city's populace. That isn't a "drop in the bucket."
    - geofft 9y ago
      Sure - I'm advocating that more cities should grow to the point that it is a drop in the bucket, by inviting not only Google but other companies and not treating any of them as special. Or, sure, they can decide that being a 100K-person town is what they want their city to be, and use zoning to actively resist any single employer having over 1K people in the town. But this isn't a Google-specific problem, and if you try to address it with Google-specific solutions (either "Take special measures to invite Google because they'll bring in high-paying jobs" or "Take special measures to exclude Google because they'll destroy your city"), you'll be in trouble when some other, possibly non-tech, employer comes along in the future.
- Xorlev 9y ago
  I've lived and worked in Colorado my whole life, joined Google Boulder about 8 months ago. Spent a ton of time in Boulder before that; my wife is from Boulder proper. Honestly? Google is barely a speck in the whirlwind of changes that Boulder is undergoing. Tech is a huge part of it, but you can't throw that entirely at Google's feet. There's been Silicon Valley expats and tons of other folks moving to Boulder for years. Back on Google for a moment: Lets talk neighborhood. The older Google buildings are renovated, small buildings. One of them was a Circuit City that closed. That should already give you a good idea of the area. It isn't trendy downtown, just primarily commercial space. The new Google building is larger, about 3 blocks away, and located in what was a basically condemned. There's empty, undeveloped lots across from it on one side, and a huge sprawling Whole Foods with a massive parking lot on the other side. Google's new building is flanked by a large Target. Overall, the building is not actually that large. It's 4 floors and built as two halves joined in the center with a bridge. It isn't the trendy part of town. It's developed a nice building in an otherwise lower-traffic area. I know there's follow-on effects from employing new folks in the area (housing, traffic, etc.), but I don't see how that's overall different from the general influx of folks into Boulder. Perhaps it's myopic of me, but I don't see "us" (as if us vs. them is a productive use of time) being a negative force. Google Boulder employs lots of folks, and the vast majority of them have lived in Colorado for more than the last few years. I'd like to know what we're doing to destroy communities and how we can prevent that.
  - hueving 9y ago
    >I'd like to know what we're doing to destroy communities and how we can prevent that. Stop moving into small cities with workers paid significantly above the average of the existing residents. Restaurants open that they can't afford, the limited housing stock gets bid up quickly, good schools get overcrowded, etc. It's not a pleasant answer, but realistically that's ultimately what upsets a good chunk of the people that complain. If you bring in 2,000 people into any small city who make $200k/year+ when the average is down around $50k/year, it's going to result in a backlash and there is nothing you can really do unless you ban your employees from spending money there. The only real strategy is to pretend you are concerned and wait for the problem to gentrify away.
- oh_sigh 9y ago
  What? Googles new office on 30th and pearl is hardly 'sprawling' - the target and wholefoods that are right next to it each take up a much bigger footprint than the office, and that is just the buildings themselves - Target and WF have surface parking which takes up huge amounts of real estate for almost zero value - whereas the Google building has 3 or 4 levels of parking underneath it, reducing their overall footprint. Man, if only Google left this lot condemned and abandoned, along with the defunct car dealership across the corner which is just an empty lot. Boulder would be so much better off. You can verify all this with the satellite photos and street view.
  - 1024core 9y ago
    > the target and wholefoods that are right next to it each take up a much bigger footprint than the office, and that is just the buildings themselves That's the problem: WF and Target pay minimum wages, and that seems to be OK with the OP. Paying more than minimum wages is the problem. S/he wants everyone to be poor.
- gowld 9y ago
  So, what's your opinion of Boulder residents who are interested in software? They should leave Boulder? Are they not part of Boulder's character?
CodeSheikh 9y ago
Google NYC is literally right across the block from Chelsea Market. This transaction would mean that Google will occupy the real estate above the actual market. Chelsea Market is an amazing place with great offerings of food etc. As long as this transaction does not ruin the ecosystem of CM then New Yorkers are OK with this transaction. Lets face it who would not want to sell their real estate to The Google?
- Touche 9y ago
  There are other office occupants though, and it sounds like Google's going to squeeze them out. So the food offerings might stay, but it's going to begin to feel like a Google cafeteria.
  - saalweachter 9y ago
    Do the businesses in Chelsea Market rely heavily on traffic from the office-workers above? Store-fronts in NYC tend to be pretty disconnected from the office/residential spaces above, with a few notable exceptions.
    - oplav 9y ago
      I don't think so. I work upstairs at a non-Google company. Most of the time, the market floor is filled with non office workers. The lunch crowd might suffer a little bit since Google employees won't need to go down for meals.
    - zohaibr 9y ago
      No, they don't. They get a ton of tourist business especially because High Line is right there.
    - aaavl2821 9y ago
      It's a great place but so busy that id be loathe to drop in for a working lunch. That place and the Rockefeller center concourse are some of the rare places in the world where getting lunch can be more stressful than work
downandout 9y ago
$1600/ft seems shockingly high for commercial real estate, even in New York. Just because you have lots of money (that theoretically belongs to your shareholders) doesn’t mean you should overpay.
- djtriptych 9y ago
  It's not shockingly high by a long shot. Paying 1.6M for a 1000 sq ft condo in that area is totally feasible.
  - karambahh 9y ago
    Unless I'm mistaken, isn't commercial real estate usually cheaper than residential?
    - downandout 9y ago
      Yes, it is. That was my point.
  - adsfasdfsad111 9y ago
    in fact, that'd be quite cheap.
- ceejayoz 9y ago
  https://www.propertyshark.com/Real-Estate-Reports/2017/03/02/nyc-cre-2016-office-report/ https://www.propertyshark.com/Real-Estate-Reports/2017/03/02... > Data analyzed by COMMERCIALCafé shows a steady rise in the average yearly sale price per square foot, starting at 2012’s $959. The price increased by 40% over 5 years, resting at $1,347 in 2016. The Y-o-Y increase was 7%. Midtown remains the highest priced NYC submarket. Last year, 50 office properties were sold at an average price of $1,531 per square foot.
  - downandout 9y ago
    So they’re paying above average, which was my point.
zerostar07 9y ago
Excellent. instead of hiring some poor chaps to remove some of the spam, lets give more money to the poor chap who owns whatever building.
- packetslave 9y ago
  wat
pixelpp 9y ago
Nooooooo! I love the Chelsea Market :/
- Xorlev 9y ago
  It's not like CM first level is going to change. The other floors are just offices, perhaps a majority of it already allocated to Google.
reaperducer 9y ago
What is it with Google and food warehouses? Its Chicago HQ used to be a meat cold storage facility. https://www.chicagoarchitecture.org/2015/03/12/dogs-and-adaptive-re-use-in-a-single-story-but-of-course/ https://www.chicagoarchitecture.org/2015/03/12/dogs-and-adap...
- vthallam 9y ago
  Easy to convert to an open office I guess?
cletus 9y ago
NYC Xoogler here. Speaking from experience, the main office (111 8th/76 9th) is amazing. I think Google's decision to buy that years ago has totally been vindicated. I'm surprised more high cash surplus companies don't do this, just to control their destiny in a way you simply can't as a tenant (eg if you're a large tenant, each floor you rent in the same building is going to get more expensive, being a tenant limits what you can do). Other posters have pointed out the Chelsea Market is a mishmash of other buildings (4 IIRC). All true. It's a super-annoying building to get around in though. To get from the 6th floor on one side to the 6th floor on the other side you might have to go to the ground floor and find the right elevator (out of like 20 in 12 different locations) that goes to that floor in that building. Some parts are only served by a single elevator. Others have a bank. Honestly I'd hate to work there, particularly if you had to go through the crowds to get to your one blessed elevator. One outcome of this might be that Google may well fix this situation by combining floors and elevator banks. I don't think anything will happen to the ground floor of Chelsea Market.
- notspanishflu 9y ago
  Has someone there considered to install a MULTI? That would be cool. https://multi.thyssenkrupp-elevator.com/en/ https://multi.thyssenkrupp-elevator.com/en/
  - apocalyptic0n3 9y ago
    MULTI has yet to be installed in an actual building and from what I recall, they believed it would likely be used in new buildings that are designed with MULTI in mind rather than retrofitting older buildings. It seems like a good use case in my mind, though I don't expect it would be implemented for at least several years while the new technology is adapted and tested in real-world scenarios
  - pbhjpbhj 9y ago
    Is it fully tested yet, that page says their new tower "will" (not does) provide testing? It's not the sort of thing I'd want to be an early adopter on.
JumpCrisscross 9y ago
I first heard about this deal around Thanksgiving. I am curious how everyone kept the real estate brokers' mouths shut for this long. For New York City, this might be a record.
- Itaxpica 9y ago
  It's the second-biggest in the city's history after the GM building in 2008, which went for 2.8 billion (https://nypost.com/2018/02/06/the-history-behind-googles-massive-chelsea-market-purchase/ https://nypost.com/2018/02/06/the-history-behind-googles-mas...). The current record for a single transaction is the Stuy Town purchase in 2015 for 5.4 billion (https://www.nytimes.com/2015/12/19/nyregion/dollar5-45-billion-deal-for-stuyvesant-town-completed-after-threatened-lawsuit.html https://www.nytimes.com/2015/12/19/nyregion/dollar5-45-billi...), but that was more than one building.
- frandroid 9y ago
  Not wanting to lose commission?
- gowld 9y ago
  Because it's not really news? Google has been growing in Chelsea for years.
  - JumpCrisscross 9y ago
    > it's not really news? Yes, it is. It's a large deal for a large plot of land in the centre of a neighborhood legendarily protective of itself.
kbumsik 9y ago
So Google is buying the real estate for office use. I guess it is not something like Amazon buying Whole Foods, right?
ucaetano 9y ago
Wow, they really got a good deal on the 111 Eighth Avenue, they bought it in 2010 by $610/sqft, and now it is probably worth the same as the Chelsea Market, $1600/sqft, a 160% return on the investment.
- airstrike 9y ago
  Annually that was "only" 13% which is still great but not 160%-great.
smpetrey 9y ago
I wonder if this will be used for Google NYC HQ, or is Google attempting to get into the co-working game?
- CydeWeys 9y ago
  This area already is our NYC HQ, and we own the much bigger 111 8th Ave building next door too. We've got many thousands of employees here already; no speculation is needed as to its status.
locopati 9y ago
Fun fact - some of the Chelsea Market buildings were originally the National Biscuit Corporation, which would later become Nabisco (combining the first syllables). You can still see the NBC logo (which is not the TV network) on parts of the building.
SFLemonade 9y ago
Between this $2B deal and the $5B Apple Park deal, I start to wonder how companies are justifying these purchases as remote and distributed work becomes more feasible. They're probably focused on the fact that productivity is still higher in co-located settings and the best talent pools are in major metro areas. But what if, instead, they invested $500M in remote work research and $500M in building a remote work infrastructure for the company. Then they can go ahead and pocket that extra $1-4B in real estate costs, and perhaps another ~$10B long term as they avoid future real estate purchases and scale this across the company. Also, save several hundred million in hiring and retention, as they attract more talent from around the world and retain employees by offering remote work as a benefit. Could this be a more forward-thinking approach? I'm merely posing the question. Real estate is super expensive, and most people would consider being able to live anywhere a huge perk. In other words, the only reason talent is so concentrated in New York, is because it has to be right now. But what will happen as more companies offer distributed work? Will people choose to continue living in metro areas with astronomical costs of living (perhaps even away from family or in a climate they don't prefer)? Or will they leave and work from wherever they want? And then what will happen to the value of this real estate? And what will happen to the companies that invested in it? I find it odd that innovative tech companies seem to not be questioning one of the more non-innovative and dogmatic practices of today - physical office space. Not only that, but they're investing billions into that idea. Why not challenge it? Or what if you took a hybrid approach? Have a collaborative space in New York that everyone can use to come together, but everyone can also work from home. You may be able to cut down the required space by 3-4x.
- huac 9y ago
  Google has experimented with that idea in London: https://www.campus.co/london/en https://www.campus.co/london/en. Free space with wifi and coffee and obviously nice furniture. They use the event space to hold tech talks and the like -- I wonder if it's worked out as more than just a brand investment.
  - SFLemonade 9y ago
    Very interesting. This seems like more of an open co-working space, but it pokes at that hybrid remote / co-located idea.
aresant 9y ago
This is such a fascinating cycle. Large pensions & sovereign wealth funds are so desperate for yield vs. low treasuries that they have pushed income producing commercial real estate values to all time highs. As a result these fund managers are then forced to take on larger risks to cover their liabilities by making larger portfolio allocations into public techs like Google, and privates like AirBNB & Uber. And this dry powder has helped the technology companies get so insanely big and sophisticated that they are hiring away the best fund guys to manage their own treasury desks and drive commercial real estate transactions like this one! Funds would have KILLED to get a deal with Google locked into a long term lease. But because Google is taking themselves off the market as a tenant, the funds again have to go and chase riskier yield, like larger allocations in tech . . . the entire macroeconomy is just turning into a bizarre Möbius strip . . .
- metalliqaz 9y ago
  What do you mean by "Google is taking themselves off the market as a tenant"?
  - bllguo 9y ago
    They bought the building and thus don't need to rent. What's the confusion?
    - metalliqaz 9y ago
      They're only "in the market" if they are shopping for a new space. They just bought the same building they were in. That doesn't affect the commercial office space market.
  - tomcam 9y ago
    Instead of renting office space they're making huge real estate purchases.
    - pbhjpbhj 9y ago
      I'd be surprised if the company in the building is the one who owns it - yes all Google, of course - but surely there's some tax avoidance possible ...
bhartzer 9y ago
Interesting to see that Chelsea Market Google My Business listing isn't claimed yet.
f1mint 9y ago
http://www.f1mint.com/ http://www.f1mint.com/
spydum 9y ago
I wonder if this has anything to do with the Cyber NYC effort? https://www.nycedc.com/opportunity/cyber-nyc-rfp https://www.nycedc.com/opportunity/cyber-nyc-rfp One of the stated objectives is to actually build out a Cyber Center in NYC as part of the jobs program. This could potentially align with Alphabet's recent "Chronicle" business being launched? I looked thru the NYCEDC Suppliers/bidders, didn't see anything resembling alphabet or chronicle though.
- CydeWeys 9y ago
  Doubt it. It most likely has to deal with Google continuing to expand its NYC office, and thus needing more office space.
rambleraptor 9y ago
At what point does it become cheaper to buy real estate in cheaper cities and use the excess money to attract talent there?
- majormajor 9y ago
  Depends on just what drives the desirability, I think. Google is covering their bases in terms of both "suburban areas" (Mountain View) and "dense cities." So they can attract people who prefer either style of living. If there's a significant subset that prefers "cheap" directly, then they're missing out on that group. Otherwise, it might be more cost effective to simply keep offering higher wages in the high-cost areas, if cost and desirability are roughly correlated for most people. Where I see it breaking down personally is that the expensive areas aren't that bad for 20-something folks who want to rent anyway. Say you throw an extra ten to twenty grand a year at rent, that can be easily covered by a compensation premium. But once you start looking at moving from renter to buyer, down payment requirements make expensive areas a lot rougher. This might be fine at Google-level compensation, but there's a lot of other companies who could have a harder and harder time retaining people as they age.
  - tropo 9y ago
    They haven't covered rural. I don't think they are even close. I know people in multiple states who like to shoot rifles (AR-15 style) and shotguns in their yards. One hunts pigs in his backyard. A different one can hunt turkey. I can't really imagine that in Mountain View or San Francisco or Manhattan. And yes, those people are tech talent.
- lotsofpulp 9y ago
  Talent will want to be around other talent, and cost won't matter since they're worth it.
- deleted 9y ago
  [deleted]
jeffchuber 9y ago
"Peter Thiel comment about Google not having good ideas for how to spend their money"
- elarahn 9y ago
  What's wrong with expanding / not leasing a long term office ?
kartan 9y ago
I visited Chelsea Market Google offices by mistake. I was at the market, and not knowing so much about it, I though that was small. So me and a friend got into the elevator to go to the next floor. The elevator just opens and there it is. It was Google´s offices with a big green Android figure. I took a picture and just went back to the market using the elevator. As it was a weekend, I was on vacation, there was no one. So "suddenly Google" is one of my memories to my travel to New York.

358 points by uptown 9y ago

Google has largely ruined Boulder, CO after building a huge new sprawling thing and effectively dictating to locals and politicians exactly how they want the neighborhood and city to be structured going forward. Everyone who isn't a googler hates them and wishes we hadn't allowed that, much less given them massive amounts of corporate welfare. Resist googlers if you can, they destroy communities.

airstrike 9y ago
Fearmongering much?
- toomuchtodo 9y ago
  SFBA, Seattle, Major Colorado Metros, Austin, Nashville, Cambridge/Boston, Raleigh-Durham. That's not fear. That's pattern recognition. > Fast-growing technology sector is fueling a housing boom in cities across America https://www.washingtonpost.com/realestate/fast-growing-technology-sector-is-fueling-a-housing-boom-in-cities-across-america/2017/01/26/5c72c276-a5d8-11e6-8042-f4d111c862d1_story.html https://www.washingtonpost.com/realestate/fast-growing-techn...
  - ryanwaggoner 9y ago
    Places that have gotten expensive because they've become desirable places to live and convinced lots of people to move there? The horror! The only real problem here is shitty local governance and NIMBYism that refuses to acknowledge reality and build more housing. In the end, it doesn't stop people from moving there, it just drives up costs and drives out natives and people lower on the socioeconomic ladder. If you want affordable housing markets, you have to build housing in response to demand. Regardless, we're talking about NYC here, so the fact that Google is buying some building instead of leasing like they have been is a total non-story. It'll have zero effect on NYC.
    - toomuchtodo 9y ago
      They've only become desirable because of an influx of tech employers. Ergo, it makes sense for non-tech employed citizens to not want those employers to locate there (or expand). Also, existing citizens who own and live in these locations take priority over people who want to move in. No one is entitled to additional housing when tech companies foist externalities of additional workers (workers who could work remotely!) on a geographic region.
      - RangerScience 9y ago
        > existing citizens who own and live in these locations take priority Yep, wealthy land owners, clearly the group that needs protecting. Actually, can anyone name a major US city where most of the growth came from itself, rather than an influx?
        toomuchtodo 9y ago
        > Yep, wealthy land owners, clearly the group that needs protecting. Wealthy land owners = citizens who have most of their personal wealth/retirements savings tied up in the equity of their home that has slowly appreciated over years or decades. How terribly different than tech companies and employees using copyright (source code) and vast quantities of data to reap enormous returns and salaries (respectively). This isn't David vs Goliath. This is New Boss vs Old Boss. Big Tech needs to get over itself. It's the new bad guy.
        davidcbc 9y ago
        So NYC aside, what is your answer for cities? How does a city improve itself without bringing in new jobs and tax revenue? Should a city just let buildings sit there and rot instead of selling them to a company that wants to create hundreds or thousands of jobs?
        toomuchtodo 9y ago
        No tax credits for businesses (See: Amazon). You pay a tax per head of employee you intend to employee onsite that covers infrastructure and subsidizing affordable housing. If you're a going concern, affordability should not be an issue. Otherwise, you're straining infrastructure and housing with marginal benefits to the host city. Hire remote instead.
finkin1 9y ago
I live in Boulder and don't share this sentiment whatsoever. Google already has a large campus here and they're expanding into an area that frankly needed to be renovated anyway. Their entire new + old complex is supposed to house ~2,000 employees. If adding 1.5k employees and a new building is "largely ruining Boulder" in your eyes you should see a doctor.
- eternalcode 9y ago
  I would suggest seeing a Geologist perhaps. Get it? Boulder? Geologist?
- hueving 9y ago
  >If adding 1.5k employees and a new building is "largely ruining Boulder" in your eyes you should see a doctor. Put some effort into understanding perspectives before resorting to derision. Bringing thousands of highly paid employees into a smaller city is often not good for many who already lives there unless they own property. The majority of the new jobs will not go to existing residents, rents will increase, restaurants will get more expensive, traffic will get worse, and everything will get more crowded. For rich city-dwellers, the above might sound like nothing, but for people who seek smaller cities it will suck because it quickly erodes the character of the city.
  - finkin1 9y ago
    I appreciate you trying to make OP's case, and I'm genuinely interested in changing my mind about this. What do you think should be done? Should growing companies be prevented from expanding because it might 'erode the character of the city'? I'm not in favor of the city subsidizing a company's growth, even if it does stimulate the economy in the long-run, but I just can't get behind any policy that would prevent a growing company due to something as nebulous as the erosion of the city's character.
    - stale2002 9y ago
      What should be done is that cities should relax zoning laws, and allow more housing to be built in high demand areas. That way the city can fit everyone, cheaply.
stevenleeg 9y ago
New York is a much larger city than Boulder. I'd assume Google would have a much tougher time trying to tell the NYC government how to operate considering how small their presence is relative to the city, even if we're just talking about Manhattan.
- danharaj 9y ago
  I find the tech scene in NYC to be a lot more tolerable than other places. It seems like many of us here understand that we're small fish compared to, say, the sharks on Wall Street.
  - ionforce 9y ago
    An interesting thing to note about tech in NYC is that it's not at all like tech in the west coast where it's tech for tech's sake. In NYC it's always in support of some other industry. Definitely gives off a different vibe.
    - hueving 9y ago
      Yeah, unfortunately it puts you lower on the totem pole as a software engineer. This results in lower salaries in general for developers there compared to the bay.
umanwizard 9y ago
You don't have a clue about New York.
jsky_goog 9y ago
The new office has been open for 3 months and Google has had a presence in Boulder for a decade. Google is pretty far from "dictating...how they want want the neighborhood and city to be structured". The city council has promoted low growth and high housing prices for decades and will continue to do so.
geofft 9y ago
The real answer is for cities to be built up so much that even a Google-sized company is a drop in the bucket. Google NYC right now is about one city block (111 8th), expanding to two. That's a tiny part of Manhattan, which isn't even all of NYC. My old church is located under the old Citigroup Center skyscraper at 601 Lexington, which is also an entire block; Citigroup used to have both that building and the block across the street, 399 Park, for a couple of decades. When they moved out of those buildings to another neighborhood in Manhattan, that caused a drop in noon mass attendance but that was really about it. Their presence didn't destroy the neighborhood, let alone the city, and their move didn't destroy it either. The fact that NYC is capable of handling Citigroup-sized companies and Google-sized companies moving in and barely even noticing is one of the deep reasons I like living in NYC. I wish more other cities would do the same, because I don't think there's anything unique to NYC about the ability to do this. Maybe population - although the Denver-Aurora-Bolder metropolitan area, at 3M, isn't that much smaller than NYC (8.5M). The internet is telling me the Google Boulder office can support up to 1,500 employees. You shouldn't give them corporate welfare, but also you should just be able to accommodate them without that, they're not that big. It should just be a building, and you should have lots of those.
- workthrowaway27 9y ago
  NYC metro area population is ~21M. It's way more dense than Colorado, so it's not surprising that a large company moving into NYC doesn't change it much.
- blackguardx 9y ago
  Boulder has a population of ~100,000. I don't oppose the Google office, but their workforce will grow to represent 1-2% of the city's populace. That isn't a "drop in the bucket."
  - geofft 9y ago
    Sure - I'm advocating that more cities should grow to the point that it is a drop in the bucket, by inviting not only Google but other companies and not treating any of them as special. Or, sure, they can decide that being a 100K-person town is what they want their city to be, and use zoning to actively resist any single employer having over 1K people in the town. But this isn't a Google-specific problem, and if you try to address it with Google-specific solutions (either "Take special measures to invite Google because they'll bring in high-paying jobs" or "Take special measures to exclude Google because they'll destroy your city"), you'll be in trouble when some other, possibly non-tech, employer comes along in the future.
Xorlev 9y ago
I've lived and worked in Colorado my whole life, joined Google Boulder about 8 months ago. Spent a ton of time in Boulder before that; my wife is from Boulder proper. Honestly? Google is barely a speck in the whirlwind of changes that Boulder is undergoing. Tech is a huge part of it, but you can't throw that entirely at Google's feet. There's been Silicon Valley expats and tons of other folks moving to Boulder for years. Back on Google for a moment: Lets talk neighborhood. The older Google buildings are renovated, small buildings. One of them was a Circuit City that closed. That should already give you a good idea of the area. It isn't trendy downtown, just primarily commercial space. The new Google building is larger, about 3 blocks away, and located in what was a basically condemned. There's empty, undeveloped lots across from it on one side, and a huge sprawling Whole Foods with a massive parking lot on the other side. Google's new building is flanked by a large Target. Overall, the building is not actually that large. It's 4 floors and built as two halves joined in the center with a bridge. It isn't the trendy part of town. It's developed a nice building in an otherwise lower-traffic area. I know there's follow-on effects from employing new folks in the area (housing, traffic, etc.), but I don't see how that's overall different from the general influx of folks into Boulder. Perhaps it's myopic of me, but I don't see "us" (as if us vs. them is a productive use of time) being a negative force. Google Boulder employs lots of folks, and the vast majority of them have lived in Colorado for more than the last few years. I'd like to know what we're doing to destroy communities and how we can prevent that.
- hueving 9y ago
  >I'd like to know what we're doing to destroy communities and how we can prevent that. Stop moving into small cities with workers paid significantly above the average of the existing residents. Restaurants open that they can't afford, the limited housing stock gets bid up quickly, good schools get overcrowded, etc. It's not a pleasant answer, but realistically that's ultimately what upsets a good chunk of the people that complain. If you bring in 2,000 people into any small city who make $200k/year+ when the average is down around $50k/year, it's going to result in a backlash and there is nothing you can really do unless you ban your employees from spending money there. The only real strategy is to pretend you are concerned and wait for the problem to gentrify away.
oh_sigh 9y ago
What? Googles new office on 30th and pearl is hardly 'sprawling' - the target and wholefoods that are right next to it each take up a much bigger footprint than the office, and that is just the buildings themselves - Target and WF have surface parking which takes up huge amounts of real estate for almost zero value - whereas the Google building has 3 or 4 levels of parking underneath it, reducing their overall footprint. Man, if only Google left this lot condemned and abandoned, along with the defunct car dealership across the corner which is just an empty lot. Boulder would be so much better off. You can verify all this with the satellite photos and street view.
- 1024core 9y ago
  > the target and wholefoods that are right next to it each take up a much bigger footprint than the office, and that is just the buildings themselves That's the problem: WF and Target pay minimum wages, and that seems to be OK with the OP. Paying more than minimum wages is the problem. S/he wants everyone to be poor.
gowld 9y ago
So, what's your opinion of Boulder residents who are interested in software? They should leave Boulder? Are they not part of Boulder's character?

CodeSheikh 9y ago

Google NYC is literally right across the block from Chelsea Market. This transaction would mean that Google will occupy the real estate above the actual market. Chelsea Market is an amazing place with great offerings of food etc. As long as this transaction does not ruin the ecosystem of CM then New Yorkers are OK with this transaction. Lets face it who would not want to sell their real estate to The Google?

Touche 9y ago
There are other office occupants though, and it sounds like Google's going to squeeze them out. So the food offerings might stay, but it's going to begin to feel like a Google cafeteria.
- saalweachter 9y ago
  Do the businesses in Chelsea Market rely heavily on traffic from the office-workers above? Store-fronts in NYC tend to be pretty disconnected from the office/residential spaces above, with a few notable exceptions.
  - oplav 9y ago
    I don't think so. I work upstairs at a non-Google company. Most of the time, the market floor is filled with non office workers. The lunch crowd might suffer a little bit since Google employees won't need to go down for meals.
  - zohaibr 9y ago
    No, they don't. They get a ton of tourist business especially because High Line is right there.
  - aaavl2821 9y ago
    It's a great place but so busy that id be loathe to drop in for a working lunch. That place and the Rockefeller center concourse are some of the rare places in the world where getting lunch can be more stressful than work

downandout 9y ago

$1600/ft seems shockingly high for commercial real estate, even in New York. Just because you have lots of money (that theoretically belongs to your shareholders) doesn’t mean you should overpay.

djtriptych 9y ago
It's not shockingly high by a long shot. Paying 1.6M for a 1000 sq ft condo in that area is totally feasible.
- karambahh 9y ago
  Unless I'm mistaken, isn't commercial real estate usually cheaper than residential?
  - downandout 9y ago
    Yes, it is. That was my point.
- adsfasdfsad111 9y ago
  in fact, that'd be quite cheap.
ceejayoz 9y ago
https://www.propertyshark.com/Real-Estate-Reports/2017/03/02/nyc-cre-2016-office-report/ https://www.propertyshark.com/Real-Estate-Reports/2017/03/02... > Data analyzed by COMMERCIALCafé shows a steady rise in the average yearly sale price per square foot, starting at 2012’s $959. The price increased by 40% over 5 years, resting at $1,347 in 2016. The Y-o-Y increase was 7%. Midtown remains the highest priced NYC submarket. Last year, 50 office properties were sold at an average price of $1,531 per square foot.
- downandout 9y ago
  So they’re paying above average, which was my point.

zerostar07 9y ago

Excellent. instead of hiring some poor chaps to remove some of the spam, lets give more money to the poor chap who owns whatever building.

packetslave 9y ago
wat

pixelpp 9y ago

Nooooooo! I love the Chelsea Market :/

Xorlev 9y ago
It's not like CM first level is going to change. The other floors are just offices, perhaps a majority of it already allocated to Google.

reaperducer 9y ago

What is it with Google and food warehouses? Its Chicago HQ used to be a meat cold storage facility. https://www.chicagoarchitecture.org/2015/03/12/dogs-and-adaptive-re-use-in-a-single-story-but-of-course/ https://www.chicagoarchitecture.org/2015/03/12/dogs-and-adap...

vthallam 9y ago
Easy to convert to an open office I guess?

cletus 9y ago

NYC Xoogler here. Speaking from experience, the main office (111 8th/76 9th) is amazing. I think Google's decision to buy that years ago has totally been vindicated. I'm surprised more high cash surplus companies don't do this, just to control their destiny in a way you simply can't as a tenant (eg if you're a large tenant, each floor you rent in the same building is going to get more expensive, being a tenant limits what you can do). Other posters have pointed out the Chelsea Market is a mishmash of other buildings (4 IIRC). All true. It's a super-annoying building to get around in though. To get from the 6th floor on one side to the 6th floor on the other side you might have to go to the ground floor and find the right elevator (out of like 20 in 12 different locations) that goes to that floor in that building. Some parts are only served by a single elevator. Others have a bank. Honestly I'd hate to work there, particularly if you had to go through the crowds to get to your one blessed elevator. One outcome of this might be that Google may well fix this situation by combining floors and elevator banks. I don't think anything will happen to the ground floor of Chelsea Market.

notspanishflu 9y ago
Has someone there considered to install a MULTI? That would be cool. https://multi.thyssenkrupp-elevator.com/en/ https://multi.thyssenkrupp-elevator.com/en/
- apocalyptic0n3 9y ago
  MULTI has yet to be installed in an actual building and from what I recall, they believed it would likely be used in new buildings that are designed with MULTI in mind rather than retrofitting older buildings. It seems like a good use case in my mind, though I don't expect it would be implemented for at least several years while the new technology is adapted and tested in real-world scenarios
- pbhjpbhj 9y ago
  Is it fully tested yet, that page says their new tower "will" (not does) provide testing? It's not the sort of thing I'd want to be an early adopter on.

JumpCrisscross 9y ago

I first heard about this deal around Thanksgiving. I am curious how everyone kept the real estate brokers' mouths shut for this long. For New York City, this might be a record.

Itaxpica 9y ago
It's the second-biggest in the city's history after the GM building in 2008, which went for 2.8 billion (https://nypost.com/2018/02/06/the-history-behind-googles-massive-chelsea-market-purchase/ https://nypost.com/2018/02/06/the-history-behind-googles-mas...). The current record for a single transaction is the Stuy Town purchase in 2015 for 5.4 billion (https://www.nytimes.com/2015/12/19/nyregion/dollar5-45-billion-deal-for-stuyvesant-town-completed-after-threatened-lawsuit.html https://www.nytimes.com/2015/12/19/nyregion/dollar5-45-billi...), but that was more than one building.
frandroid 9y ago
Not wanting to lose commission?
gowld 9y ago
Because it's not really news? Google has been growing in Chelsea for years.
- JumpCrisscross 9y ago
  > it's not really news? Yes, it is. It's a large deal for a large plot of land in the centre of a neighborhood legendarily protective of itself.

kbumsik 9y ago

So Google is buying the real estate for office use. I guess it is not something like Amazon buying Whole Foods, right?

ucaetano 9y ago

Wow, they really got a good deal on the 111 Eighth Avenue, they bought it in 2010 by $610/sqft, and now it is probably worth the same as the Chelsea Market, $1600/sqft, a 160% return on the investment.

airstrike 9y ago
Annually that was "only" 13% which is still great but not 160%-great.

smpetrey 9y ago

I wonder if this will be used for Google NYC HQ, or is Google attempting to get into the co-working game?

CydeWeys 9y ago
This area already is our NYC HQ, and we own the much bigger 111 8th Ave building next door too. We've got many thousands of employees here already; no speculation is needed as to its status.

locopati 9y ago

Fun fact - some of the Chelsea Market buildings were originally the National Biscuit Corporation, which would later become Nabisco (combining the first syllables). You can still see the NBC logo (which is not the TV network) on parts of the building.

SFLemonade 9y ago

Between this $2B deal and the $5B Apple Park deal, I start to wonder how companies are justifying these purchases as remote and distributed work becomes more feasible. They're probably focused on the fact that productivity is still higher in co-located settings and the best talent pools are in major metro areas. But what if, instead, they invested $500M in remote work research and $500M in building a remote work infrastructure for the company. Then they can go ahead and pocket that extra $1-4B in real estate costs, and perhaps another ~$10B long term as they avoid future real estate purchases and scale this across the company. Also, save several hundred million in hiring and retention, as they attract more talent from around the world and retain employees by offering remote work as a benefit. Could this be a more forward-thinking approach? I'm merely posing the question. Real estate is super expensive, and most people would consider being able to live anywhere a huge perk. In other words, the only reason talent is so concentrated in New York, is because it has to be right now. But what will happen as more companies offer distributed work? Will people choose to continue living in metro areas with astronomical costs of living (perhaps even away from family or in a climate they don't prefer)? Or will they leave and work from wherever they want? And then what will happen to the value of this real estate? And what will happen to the companies that invested in it? I find it odd that innovative tech companies seem to not be questioning one of the more non-innovative and dogmatic practices of today - physical office space. Not only that, but they're investing billions into that idea. Why not challenge it? Or what if you took a hybrid approach? Have a collaborative space in New York that everyone can use to come together, but everyone can also work from home. You may be able to cut down the required space by 3-4x.

huac 9y ago
Google has experimented with that idea in London: https://www.campus.co/london/en https://www.campus.co/london/en. Free space with wifi and coffee and obviously nice furniture. They use the event space to hold tech talks and the like -- I wonder if it's worked out as more than just a brand investment.
- SFLemonade 9y ago
  Very interesting. This seems like more of an open co-working space, but it pokes at that hybrid remote / co-located idea.

aresant 9y ago

This is such a fascinating cycle. Large pensions & sovereign wealth funds are so desperate for yield vs. low treasuries that they have pushed income producing commercial real estate values to all time highs. As a result these fund managers are then forced to take on larger risks to cover their liabilities by making larger portfolio allocations into public techs like Google, and privates like AirBNB & Uber. And this dry powder has helped the technology companies get so insanely big and sophisticated that they are hiring away the best fund guys to manage their own treasury desks and drive commercial real estate transactions like this one! Funds would have KILLED to get a deal with Google locked into a long term lease. But because Google is taking themselves off the market as a tenant, the funds again have to go and chase riskier yield, like larger allocations in tech . . . the entire macroeconomy is just turning into a bizarre Möbius strip . . .

metalliqaz 9y ago
What do you mean by "Google is taking themselves off the market as a tenant"?
- bllguo 9y ago
  They bought the building and thus don't need to rent. What's the confusion?
  - metalliqaz 9y ago
    They're only "in the market" if they are shopping for a new space. They just bought the same building they were in. That doesn't affect the commercial office space market.
- tomcam 9y ago
  Instead of renting office space they're making huge real estate purchases.
  - pbhjpbhj 9y ago
    I'd be surprised if the company in the building is the one who owns it - yes all Google, of course - but surely there's some tax avoidance possible ...

bhartzer 9y ago

Interesting to see that Chelsea Market Google My Business listing isn't claimed yet.

f1mint 9y ago

http://www.f1mint.com/ http://www.f1mint.com/

spydum 9y ago

I wonder if this has anything to do with the Cyber NYC effort? https://www.nycedc.com/opportunity/cyber-nyc-rfp https://www.nycedc.com/opportunity/cyber-nyc-rfp One of the stated objectives is to actually build out a Cyber Center in NYC as part of the jobs program. This could potentially align with Alphabet's recent "Chronicle" business being launched? I looked thru the NYCEDC Suppliers/bidders, didn't see anything resembling alphabet or chronicle though.

CydeWeys 9y ago
Doubt it. It most likely has to deal with Google continuing to expand its NYC office, and thus needing more office space.

rambleraptor 9y ago

At what point does it become cheaper to buy real estate in cheaper cities and use the excess money to attract talent there?

majormajor 9y ago
Depends on just what drives the desirability, I think. Google is covering their bases in terms of both "suburban areas" (Mountain View) and "dense cities." So they can attract people who prefer either style of living. If there's a significant subset that prefers "cheap" directly, then they're missing out on that group. Otherwise, it might be more cost effective to simply keep offering higher wages in the high-cost areas, if cost and desirability are roughly correlated for most people. Where I see it breaking down personally is that the expensive areas aren't that bad for 20-something folks who want to rent anyway. Say you throw an extra ten to twenty grand a year at rent, that can be easily covered by a compensation premium. But once you start looking at moving from renter to buyer, down payment requirements make expensive areas a lot rougher. This might be fine at Google-level compensation, but there's a lot of other companies who could have a harder and harder time retaining people as they age.
- tropo 9y ago
  They haven't covered rural. I don't think they are even close. I know people in multiple states who like to shoot rifles (AR-15 style) and shotguns in their yards. One hunts pigs in his backyard. A different one can hunt turkey. I can't really imagine that in Mountain View or San Francisco or Manhattan. And yes, those people are tech talent.
lotsofpulp 9y ago
Talent will want to be around other talent, and cost won't matter since they're worth it.
deleted 9y ago
[deleted]

jeffchuber 9y ago

"Peter Thiel comment about Google not having good ideas for how to spend their money"

elarahn 9y ago
What's wrong with expanding / not leasing a long term office ?

kartan 9y ago

I visited Chelsea Market Google offices by mistake. I was at the market, and not knowing so much about it, I though that was small. So me and a friend got into the elevator to go to the next floor. The elevator just opens and there it is. It was Google´s offices with a big green Android figure. I took a picture and just went back to the market using the elevator. As it was a weekend, I was on vacation, there was no one. So "suddenly Google" is one of my memories to my travel to New York.