Google plans to buy $2.1 billion New York office building

Google has had an office in New York City for more than 20 years, and it has hired 12,000 people in the city as it became one of the most popular search engines in the world.

On Tuesday, the company announced its plans to buy a New York office, and it is one that will feel familiar to existing staff. Rather than continue to lease St John’s Terminal building in the Hudson Square neighborhood of Manhattan, Google intends to buy the building outright.

Like many tech businesses, Google has managed to continue to grow its business during the COVID-19 pandemic because people relied on online services more than ever. On the back of this climate, the advertising revenue of Google increased by 69% in 2021.

The campus will be about 1.7 million square feet and house Google’s sales and partnerships teams; it is expected that the St John’s Terminal site will be open to staff by mid-2023.

CFO Ruth Porat wrote in the blog post which announced the plans, that the building would “serve as the anchor” for the future of work at Google.

Porat added: “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.”

The return to the office

After some initial reluctance, Google has now embraced the reality of hybrid working and has stated that it will give employees choice about where they work. Nonetheless, this investment shows a commitment to giving employees a collaborative space.

A study conducted by PwC, which surveyed 133 executives and 1,200 office workers in November and December 2020, found that remote working had been a success. In fact, 83% of employers say the shift to remote work has been successful.

However, 75% of executives anticipate that at least half of office employees will be working in the office and there has been a defined need for the least experienced staff to return for their development and relationships.

With this in mind, Google’s move to return people to the St John’s Terminal office in two years could be a wise decision, although there will undoubtedly be challenges. Interestingly, PWC found that less than 20% of executives want to return to the office as it was pre-pandemic.

On top of that, Google will have to invest in technology to ensure the safety of employees. At the moment, the company has decided to enforce a vaccine mandate.

To ensure this return to work has been a success, companies have developed platforms that enable employers to see the vaccine status of their staff. Notably, ServiceNow has offered this with its Vaccine Administration Management (VAM).  Bill McDermott, president and CEO of ServiceNow, discussed VAM, stating that it used the “power of our Now Platform to provide the scale, speed, and flexibility needed.”

VAM intends to be “a modern, self-service experience across desktop and mobile devices.”

Google may have to alter the layout of its offices and introduce new technology to successfully return to work. As a result, there may be some changes from when St John’s Terminal building was leased.