What could Google do with 111 Eighth Ave building? A new bargaining chip

It’s been two weeks since Google announced they bought 111 Eighth ave.



Investing in New York

12/22/2010 11:00:00 AM

Google New York started in a Starbucks on 86th Street with one person in 2000—a scrappy, highly-caffeinated sales “team.” After moving to a larger office in Times Square, in 2006 we relocated to our current home in Chelsea, at 111 Eighth Avenue—a former Port Authority building. In June of 2008, we took additional space in the Chelsea Market building at 75 Ninth Avenue. Now we have more than 2,000 Googlers working on a variety of projects in both sales and engineering—and we’re hiring across the board.
Today, we’re pleased to announce that we’ve closed a deal with the partnership of Taconic Investment Partners, Jamestown Properties and the New York State Common Retirement Fund to purchase 111 Eighth Avenue (also known as 76 Ninth Avenue). As part of the deal, we’ve retained Taconic Management Company to continue the leasing oversight services and management of the building on our behalf, providing the same level of customer service the building’s tenants have come to expect. We believe that this is a great real estate investment in a thriving neighborhood and a fantastic city.

Google could eventually grow to occupy the whole building, but is that worth $1.9 billion?  Is it to speculate on NY real estate, and sell at a gain?

How about this for an idea?

Google now owns a premium networking access point in NYC, the biggest concentration of money in the USA with the financials, stock exchanges, and other businesses.

As Google negotiates carrier access in various markets, it can offer a presence in 111 Eighth Ave.  This can change price points, and guarantees of service and access.

If Emerging Market Telecom sets up a relationship with Google, and agrees to a presence in 111 Eighth Ave, then the more the Emerging Market Telecom needs the location due to a variety of economic and technical reasons, the value works for Google.

Did Google just buy one the biggest bargaining chips it could have to negotiate access to WW Telcos?