Last month, we told you that the gargantuan 111 Eighth Ave., a building which occupies an entire city block in Chelsea, and which is home to Google's (GOOG) New York headquarters -- is for sale.
Now, it appears that the likely buyer is none other than Google itself. Rumored sale price? A cool $2 billion, according to the New York Post. 111 Eighth Ave. is the former Port Authority headquarters and one of the city's largest buildings, at nearly 3 million square feet.
It also happens to be one of the East Coast's key "telecom hotels" -- centralized locations where groups of communications and networking firms hook up their hardware. Google is already the largest tenant, leasing 500,000 square feet over three floors.
The building's ownership group, which includes Taconic Partners, has been shopping the massive structure around the market for several months. A $2 billion sale would easily be New York City largest real estate transaction of the year. The building was valued at $300 million in 1998, $800 million in 2004, and possibly, $2 billion today.
Google can afford the purchase; the company is sitting on about $33 billion in cash and marketable securities.
Here's how I described 111 Eighth Ave. for a Village Voice article that marked Google's 2006 arrival in New York.
111 Eighth Avenue, designed by Lusby Simpson and completed in 1932 to house the Port Authority of New York, is one of the largest buildings in the city, an architectural marvel, and a landmark. Looming like a 15-story locomotive over Chelsea, the mammoth red-brick structure occupies an entire city block between Eighth and Ninth avenues and 15th and 16th streets -- a footprint larger than two football fields.
The art deco landmark is fast becoming one of the most important high-tech facilities in the world. Google's blockbuster invasion of New York and its impending takeover of nearly two floors of the massive building aim to make New York City a key component of its little-publicized global expansion -- the details of which have become fodder for a mildly hysterical parlor game in the technology community and on Wall Street. The ultimate goal? Perhaps the planet's biggest ever computer network, bypassing all those pesky cable and telephone companies.
That's why what lies beneath 111 Eighth Avenue may be more important than the building itself. The old Port Authority headquarters sits atop one of the main fiber optic arteries in New York City -- the Hudson Street/Ninth Avenue "fiber highway." The venerable behemoth is already one of the country's most important "carrier hotels" -- loosely speaking, the physical connection points of the world's telecommunications networks and the World Wide Web. As a result, Google will "have access to as much bandwidth as possible and as much variety of bandwidth as possible," says Dana Spiegel, a technology consultant and executive director of NYC Wireless.