Google Shells Out $2.4B for Manhattan’s Chelsea Market
The tech giant acquired the 1.2 million-square-foot asset from Jamestown. The Atlanta-based real estate company will continue to manage the ground-floor retail and food hall.
By Gail Kalinoski
Chelsea Market
Google Inc. has confirmed the closing of the $2.4 billion acquisition of the 1.2 million-square-foot Chelsea Market complex in Manhattan from Jamestown. This is the second-largest full single-asset sale in New York City to date.
Located at 75 Ninth Ave., the former Nabisco factory occupies the full block between Ninth and 10th avenues and West 15th and West 16th streets in the West Chelsea section of Lower Manhattan. Redevelopment of the property began in 1995, when real estate investor Irwin Cohen bought the site to create a new home for the city’s flower district. In 2003, Jamestown purchased a 75 percent interest in Chelsea Market. The Atlanta-based real estate and investment company further repositioned the site by reinforcing the food hall and attracting tech, media and creative tenants to the upper floors. Tenants include the Food Network, Oxygen and Major League Baseball, as well as Google, which already leases about 400,000 square feet.
In a blog post on the company’s website, David Radcliffe, Google vice president of real estate and workplace services, called Chelsea Market a “cornerstone of the Chelsea-Meatpacking district” that had been serving the local community for more than 20 years.
“The iconic ground floor market attracts visitors from all over the world and provides a great experience for foodies and shoppers alike,” Radcliffe wrote. “With our purchase of the building, we’ve agreed to work together with Jamestown to ensure a smooth transition with little or no impact on the community and tenants of the building. As part of this effort, Jamestown will continue to manage the retail and food hall.”
Jamestown was represented in the sale by Doug Harmon, Adam Spies and Kevin Donner of Cushman & Wakefield. Darcy Stacom of CBRE represented Google.
In 2012, as part of an effort to add office space following the global recession of 2008, New York City approved a 300,000-square-foot addition to Chelsea Market. The expansion approval came after the August 2011 recapitalization of the property. Jamestown, which by that point had bought out its partners, had received a $380 million loan from German bank Landesbank Baden-Wurttemberg.
Jamestown and adaptive reuse
Over the last three decades, Chelsea Market has been among several nationally recognized adaptive reuse projects spearheaded by Jamestown. Others include Industry City in Brooklyn, Ponce City Market in Atlanta, the Innovation and Design Building in Boston, Brunswig Square in Los Angeles, and the Falchi Building in Queens.
“For Jamestown, this is the highest profile example to date of our unique approach to creating value, but it’s consistent with transformative projects we’ve successfully undertaken across the country,” Michael Phillips, Jamestown president, said in a prepared statement. “It’s a combination of identifying underutilized locations, creative and visionary repositioning, value-creating management, rigorous financial analysis, and patience.”
This is not the first Manhattan property Jamestown has sold to the tech giant. In 2010, Jamestown and its partners sold 111 Eighth Ave. for $1.8 billion, which sits directly across Ninth Avenue from Chelsea Market. Google had leased space in the 2.9 million-square-foot building for its New York headquarters since 2006. The tech giant also rents space at 85 10th Ave. The New York Post reported in early February, when news first broke of the massive deal, that Google plans to connect the properties on both sides of the High Line with either below- or above-ground pedestrian walkways.
Image courtesy of Jamestown
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