Google Finalizes Chelsea Market Buyout, Expands NY Business
Per Reuters, Alphabet’s Inc. GOOGL division Google finalized the purchase of New York-based Chelsea Market from Jamestown LP, an Atlanta-based real estate and asset management company, for $2.4 billion.
The deal, announced in early February 2018, is likely to strengthen Google’s footprint in New York and will expand its business. The deal provides the company with the ownership rights of a huge office building. Reportedly, it is the second most expensive purchase of a single building in the history of New York.
Chelsea Market, formerly known as Nabisco Cookie factory, is a 1.19-million square foot complex adjacent to the Google’s New York headquarter. The building has a shopping mall and a food court which is the center of attraction for most of the local visitors and tourists.
The food hall will continue to operate and will be managed by Jamestown.
Coming to the share price movement, the shares of Google have returned 28.9% over a year, outperforming the industry’s rally of 17.7%.
Expanding Business in New York
The property purchase bodes well for the company’s strong focus on expanding its business in the city.
In 2010, Google bought the 111 Eighth Avenue building for almost $1.78 million, which is its current New York headquarter. Since then the company is continuously focused on expanding its New York campus. Reportedly, Google expanded its office campus in the neighbourhood by leasing almost 400,000 square feet in the Chelsea Market.
Recently, the company leased spacein Pier 57 building, located next to its headquarter in the city. Currently, the company has 7,000 employees in the city and its employee strength is likely to boost with the office expansion.
New York, which seems to be the hub of talent and reached 128,600 of tech employment last year, will provide more expertise to the company which will benefit the production efficiency and business model.
Improving Competitiveness
Google’s competitive position will improve with its office expansion in New York against the likes of Amazon AMZN, Facebook FB, Salesforce CRM and Spotify.
Reportedly, all these companies are striving to expand their office and business further in the city and all of them have successfully shifted their office campus to New York.
New York is among the 20 cities on the list of Amazon’s second headquarter. Thus, Google’s office expansion in New York will benefit the company’s position in the market.
Currently, Google carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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