Entertainment

Google buys NYC skyscraper in the exclusive Hudson Square for $2.1B


Google announced it has plans to buy a 1.3million-sq-ft building in Hudson Square for $2.1billion, its second biggest purchase of office space to date in New York City, even though the company has repeatedly promoted remote work. 

The purchase, which Google said would happen in the first quarter of 2022, will be the most expensive sale of an office building in the country since the pandemic and will make Google one of the biggest commercial property owners, The Wall Street Journal reported.

The plan comes on the heels of Google’s announcement saying it will slash the salaries of staff who refused to return to the office with those who live further away hit harder. 

Construction in 550 Washington Street is underway and the company is expected to move in sometime in 2023. The building is part of a Hudson Square campus investment dubbed ‘Googleplex’ that will include a total of 1.7million-sq-ft of office space including two other sites at 315 and 345 Hudson Square. 

Google currently leases 315 and 345 Hudson Square and has not announced plans to purchase the sites. The tech giant has also been leasing the site of 550 Washington Street during construction, but will go forward with the purchase next year. 

DailyMail.com contacted Google and the company confirmed that the building in Washington Street will be headquarters for Google’s Global Business Organization.

Scroll down for video 

Google announced it has plans to buy a 1.3million-sq-ft skyscraper in 550 Washington Street for $2.1billion, its biggest purchase of office space to date in New York City. The tech giant has also been leasing the site since 2020 

In March, Google announced plans to invest $250million in office presence in the city. An aerial view shows 550 Washington Street, which will be part of a campus complex dubbed 'Googleplex' along with buildings at 315 and 345 Hudson Square

In March, Google announced plans to invest $250million in office presence in the city. An aerial view shows 550 Washington Street, which will be part of a campus complex dubbed ‘Googleplex’ along with buildings at 315 and 345 Hudson Square

The purchase, which Google said would happen in the first quarter of 2022, will be the most expensive sale of an office building in the country since the pandemic started. The company is expected to move in sometime in 2023

The purchase, which Google said would happen in the first quarter of 2022, will be the most expensive sale of an office building in the country since the pandemic started. The company is expected to move in sometime in 2023

In a September update from YIMBY, the top floors of the building had been enclosed in floor-to-ceiling glass and metal panels wrapping all four sides of the office complex. 

In March, Google announced plans to invest $250million in office presence in the city. The company, which has had presence in New York City since 2000, now employs 12,000 workers in its city campuses, the largest outside of California.   

Although Google has reinforced the notion that the company encourages its workers to work remotely, its expanding of office footprint and salary reduction to employees who work from home hints otherwise. 

Screenshots of Google’s internal salary calculator show that an employee living in Stamford, Connecticut – an hour from New York City by train – would be paid 15 percent less if she worked from home, while a colleague from the same office living in New York City would see no cut from working from home. 

This map shows the locations of Google office space, leased and owned, in Manhattan. Along with 'Googleplex,' of which Google will own 550 Washington Square in 2022, the company owns 111 Eight Ave in Chelsea Market and 450 W. 15th Street

This map shows the locations of Google office space, leased and owned, in Manhattan. Along with ‘Googleplex,’ of which Google will own 550 Washington Square in 2022, the company owns 111 Eight Ave in Chelsea Market and 450 W. 15th Street

The building is part of a campus investment dubbed 'Googleplex' that will include a total of 1.7million-sq-ft of office space including two other sites at 315 and 345 Hudson Square. Google currently leases 315 and 345 Hudson Square and has not announced plans to purchase the sites

The building is part of a campus investment dubbed ‘Googleplex’ that will include a total of 1.7million-sq-ft of office space including two other sites at 315 and 345 Hudson Square. Google currently leases 315 and 345 Hudson Square and has not announced plans to purchase the sites

Construction in 550 Washington Street, which Google already leases, is underway. Construction topped out in 2020 and the top floors of the building have already been enclosed in floor-to-ceiling glass and metal panels wrapping all four sides of the complex

Construction in 550 Washington Street, which Google already leases, is underway. Construction topped out in 2020 and the top floors of the building have already been enclosed in floor-to-ceiling glass and metal panels wrapping all four sides of the complex

The building is a former freight facility known as St. John's Terminal, which was the terminus of the New York Central Railroad's West Side viaduct

The building is a former freight facility known as St. John’s Terminal, which was the terminus of the New York Central Railroad’s West Side viaduct

The move is part of a Silicon Valley experiment and will see employees who work from home paid less because of the savings they make on commuting and costs like food. 

In the announcement Tuesday, Google CFO Ruth Porat said that the office space purchase followed a plan to get employees back to the office.  

‘As Google moves toward a more flexible hybrid approach to work, coming together in person to collaborate and build community will remain an important part of our future. It is why we continue investing in our offices around the world. Our decision to exercise our option to purchase St. John’s Terminal further builds upon our existing,’ Porat said.

The building, equivalent to two city blocks, is a former freight facility known as St. John’s Terminal, which was the terminus of the New York Central Railroad’s West Side viaduct.

Google also owns office space in 111 Eighth Ave. and the Milk Building at 450 W. 15th St. Once the Washington Street purchase goes through, Google one of the biggest commercial property owners in New York City

Google also owns office space in 111 Eighth Ave. and the Milk Building at 450 W. 15th St. Once the Washington Street purchase goes through, Google one of the biggest commercial property owners in New York City 

Google's Chelsea office space in New York takes up an entire city block on 8th Avenue between 15th and 16th Streets

 Google’s Chelsea office space in New York takes up an entire city block on 8th Avenue between 15th and 16th Streets

Turner Construction is responsible for the 12-story steel-framed building. Google also owns office space in the Milk Building at 450 W. 15th St.  

In 2018, Google bought Manhattan’s Chelsea Market for $2.4billion, where the office space takes up an entire city block on 8th Avenue between 15th and 16th Streets.

Google did not back up from its plans to expand office space in New York City, even after Amazon had to pull out from building second headquarters due to backlash from lawmakers and residents. 

If something, Google’s announcement was commended by local politicians. 

Manhattan Borough President Gale Brewer said: ‘New York City is the place for world-class talent and Google’s acquisition of 550 Washington Street in Manhattan for its workforce demonstrates that.’  

Mayor DeBlasio and New York Governor Kathy Hochul also weighed in on Google’s announcement.  

DeBlasio said that the purchase would encourage recovery after the financial losses the city endured in the pandemic and its aftermath. 

‘Google’s historic investment in New York City marks an enormous step for our recovery,’ he said. ‘Our economy is going to come back stronger and fairer than ever by creating thousands upon thousands of new tech jobs, supporting small businesses and showing the world the strength of New York City’s diverse, unparalleled workforce.’

‘This announcement from Google is yet another proof point that New York’s economy is recovering and rebuilding. We are creating jobs, investing in emerging industries, lifting up New Yorkers, and together, we are writing our comeback story,’ said Hochul.

Stick and carrot method to end WFH: Google plans to slash salaries of staff who refuse to return to desks while London lettings firm says demand is rising for ‘destination’ offices with gyms, roof-terraces and running tracks

Google is planning to slash the salaries of staff who refuse to return to the office with those who live further away hit harder. 

The move is part of a Silicon Valley experiment and will see employees who work from home paid less because of the savings they make on commuting and costs like food. 

Though the plans are being considered in the US for the moment, it is thought that Google could later apply them to its London office. 

The tech giant is preparing for UK staff to return to the office from October – though it expects about a fifth of staff to continue working from home. 

And, according to research from CV Library and Reed, the number of working from home positions available are continuing to rise. 

CV library carried nearly 70,000 postings which allowed remote working between March and July 2021 – four times the number of the year before. On Reed, just 1% of jobs offered remote working in 2019, with the number now at 5%

However, Paul Williams, chief executive of property firm Derwent London, says he expects businesses to return to the office from September, with demand rising for offices with amenities such as gyms, bars and running tracks. 

A running track at a site owned by property firm Derwent London. The firm's CEO said demand is rising for offices with appealing amenities

A running track at a site owned by property firm Derwent London. The firm’s CEO said demand is rising for offices with appealing amenities

Google headquarters in London. Google is planning to pay employees who work from home less because of the savings they make on commuting and costs like food

Google headquarters in London. Google is planning to pay employees who work from home less because of the savings they make on commuting and costs like food

The cost of commuting: Mail Online analysis on the thousands of pounds and hundreds of hours people living outside London spend commuting to and from work in the capital. Hours calculated through average journey time multiplied by number of days average UK worker works

The cost of commuting: Mail Online analysis on the thousands of pounds and hundreds of hours people living outside London spend commuting to and from work in the capital. Hours calculated through average journey time multiplied by number of days average UK worker works

It comes after it was revealed that Whitehall officials are considering stripping civil servants of their London weighting if they continue working from home – a salary boost worth around £4,000. 

Downing Street refused to condemn civil servants resisting a return to Whitehall, however, amid the calls for them to face a pay cut if they want to continue to work from home.  

Property firm chief Mr Williams told BBC Radio 4 Today that his clients are eager to return to offices from September. 

He said: ‘The demand is being driven by a war for talent. There’s a fight for good, green buildings that are zero carbon. 

‘An adaptable place, a place for people to go for amenities, a building that’s got a running track and all the things. A place to go and develop and have creativity.

‘Talking to our customers over the last 6 to 18 months there’s a strong desire to get back. We are seeing a desire to get back and lots more people planning to get back from September. 

‘People want to go back to the office. Whether it’s to learn or see their colleagues. We’ve got a lot of roof terraces, bars, gyms. If you keep creating great buildings, more people will come back.’   

MailOnline analysis suggests workers could save thousands of pounds and hundreds of hours by working from home instead of commuting into an office in London. 

Property firm chief Mr Williams told BBC Radio 4 Today that his clients are eager to return to offices from September

Property firm chief Mr Williams told BBC Radio 4 Today that his clients are eager to return to offices from September 

Mr Williams says he expects businesses to return to the office from September, with demand rising for offices with amenities such as gyms, bars and running tracks

Mr Williams says he expects businesses to return to the office from September, with demand rising for offices with amenities such as gyms, bars and running tracks

Mr Williams added: 'People want to go back to the office. Whether it's to learn or see their colleagues. We've got a lot of roof terraces, bars, gyms. If you keep creating great buildings, more people will come back'

Mr Williams added: ‘People want to go back to the office. Whether it’s to learn or see their colleagues. We’ve got a lot of roof terraces, bars, gyms. If you keep creating great buildings, more people will come back’

Some of the available amenities in an office building developed by property developer Derwent London

Some of the available amenities in an office building developed by property developer Derwent London

Congestion on UK streets is still comfortably less than the same time in 2020 and 2019 as people gradually return to the office

Congestion on UK streets is still comfortably less than the same time in 2020 and 2019 as people gradually return to the office

From Sevenoaks, an annual season ticket costs £3,804, while the journey would see you spend around four hours travelling per week. Annually, this adds up to 166 hours.

From Windsor to London, an annual season ticket costs £3,468, with commuters spending 10 hours a week travelling and 454 hours a year. 

Travel times are the same for Oxford to London – though a season ticket costs £5,544.

Those areas are among some of the most popular destinations for Londoners who left the capital during the pandemic. 

Now, Google is appearing to crackdown on those working from home with its new policy. 

The plan suggests the firm will deduct salaries based on money saved by commuters.  

‘Our compensation packages have always been determined by location, and we always pay at the top of the local market based on where an employee works from,’ a Google spokesperson said, adding that pay will differ from city to city.

In the US, one Google employee, who asked not to be identified for fear of retaliation, typically commutes to the Seattle office from a nearby county and would see their pay cut by about 10% by working from home full-time, according estimates by the company’s Work Location Tool launched in June.

The employee was considering remote work but decided to keep going to the office – despite the two-hour commute. ‘It’s as high of a pay cut as I got for my most recent promotion. I didn’t do all that hard work to get promoted to then take a pay cut,’ they said.

Jake Rosenfeld, a sociology professor at Washington University in St. Louis who researches pay determination, said Google’s pay structure raises alarms about who will feel the impacts most acutely, including families.

‘What’s clear is that Google doesn’t have to do this,’ Rosenfeld said. ‘Google has paid these workers at 100% of their prior wage, by definition. So it’s not like they can’t afford to pay their workers who choose to work remotely the same that they are used to receiving.’

Screenshots of Google’s internal salary calculator show that an employee living in Stamford, Connecticut – an hour from New York City by train – would be paid 15% less if she worked from home, while a colleague from the same office living in New York City would see no cut from working from home. 

Interviews with Google employees indicate pay cuts as high as 25% for remote work.    

News of Google’s plan comes as Lee Biggins, founder and CEO of CV Library, says he believes working from home is here to stay.

He told MailOnline: ‘Contractual obligations, weighting allowances and individual circumstances will be unique to each business. What is apparent is that flexible working is here to stay and we’re in a candidate led market with job postings at a record high. 

‘If businesses choose to cut salaries and benefits for those working from home, there will be plenty opportunities from companies who will be prepared to meet the needs of top job seekers.’

In a recent survey, CV Library asked 2,000 candidates the most important factors in choosing a new job. 

More than 50% said a competitive salary – while 43% said reasonable hours and 38.2% said flexible working.

Marcus Storm, of the United Tech and Allied Workers union, said that Google would set a ‘dangerous precedent’ if it tried to also cut salaries for home workers in the UK. 

He told the Times: ‘You are discriminating based on where a worker lives not on their ability or even their ability to come into the office.’ 

Joseph Lappin, head of employment at Stewarts, a law firm, said that British workers had ‘greater protections’ than their counterparts in the US. ‘Employers cannot unilaterally change a key term of the employment contract. Pay will always be a key term,’ he said. 

Paul Nowak, the TUC’s deputy general secretary, said: ‘After working hard at home during the pandemic, many workers will want to retain the option of hybrid working into the future. Employers need to negotiate their approach with their staff and unions — without threatening cuts to their pay.’

Civil service union chiefs blasted a Cabinet minister last night for suggesting staff should have their pay cut if they refuse to return to Whitehall (stock image)

Civil service union chiefs blasted a Cabinet minister last night for suggesting staff should have their pay cut if they refuse to return to Whitehall (stock image)

Meanwhile, civil service union chiefs blasted a Cabinet minister last night for suggesting staff should have their pay cut if they refuse to return to Whitehall.

They accused ministers of ‘dreaming up a rufty-tufty strategy’ that was ‘devoid of any basis in reality’ to force civil servants back into their offices.

Mandarins are also said to have considered stripping civil servants of their London weighting – a salary boost worth around £4,000.

But Dave Penman, general secretary of the FDA – the union representing senior civil servants, accused ministers of making ‘reckless’ and ‘cowardly’ attacks. 

He said it would be a ‘legal minefield’ to withdraw London weighting and said those proposing it had ‘no idea how this works in reality’.

The PCS, the union for those in government departments, has warned of potential strike action if the Government tries to dock civil servants’ pay. 

A Government spokesman said yesterday there were ‘no plans to change terms and conditions around London-based pay’.



Source link

Related Articles

Back to top button