Google’s $2.5B deal for Chelsea Market is second-largest ever in NYC
Just call it Alphabet Alley. Google, whose parent company is now named Alphabet, is buying everyone’s favorite Chelsea Market from Jamestown for a price that sources say will hit — if not top — an astounding $2.5 billion.
At that altitude, the deal will become the second-largest full single-asset sale ever in the Big Apple.
The $2.8 billion sale of the GM Building in 2007 is No. 1.
Google previously bought 111 Eighth Ave. in 2010 for $1.77 billion as well as 85 Tenth — and has a purchase option on more than 250,000 square feet it will be leasing at the nearby Super Pier 57, as well as leases at other area properties.
With an address of 75 Ninth Ave., the full-block Chelsea Market sits next to the High Line and is bounded by Eighth Avenue, and West 15th and West 16th streets. Its 1.2 million square feet is cobbled together from 19 adjacent former factory buildings, and it has additional air rights that can bring it to 1.5 million square feet.
The ground floor is a lively, meandering hallway filled with food shops, restaurants and wholesalers that was created by the building’s “mayor,” Irwin Cohen, and architect Jeff Vandeberg in the mid-1990s after acquiring a $9.5 million mortgage made by the former owners.
Upstairs, Cohen rented offices to internet and television companies like the Food Network, Oxygen and Major League Baseball, and installed dedicated elevators with décor reflecting each tenant.
Cohen has been operating the property with Jamestown, an Atlanta-based German pension fund manager that previously bought him out. Jamestown also owns One Times Square, where the New Year’s Eve ball drop takes place, among other buildings.
The astounding appreciation of the asset once again highlights the growing value and wealth created by city properties, which are a preferred global investment vehicle — albeit with its own price corrections from time to time.
Longtime Jamestown adviser Douglas Harmon of Cushman & Wakefield represented the seller.
It is likely that Google will take over the current $480 million mortgage, as it did when it purchased 111 Eighth from Jamestown and Taconic Partners in 2010, also through Harmon.
Google has expanded into Chelsea Market, where it leases about 400,000 square feet.
The transaction was first revealed by the Real Deal with a pricing of about $2 billion.
It is expected to close later this year and all parties declined comment.