With Google’s recently announced $1 billion Manhattan expansion, the tech giants’ race for a greater New York presence is in full-swing and shaping up to be a major boon for the city’s tech industry and residential market.
According to a statement from the search engine leader, Google plans to expand its offices in the West Village in order to accommodate an additional 7,000 employees, doubling its New York staff to 14,000 total throughout the next decade.
New offices are slated for 315 and 345 Hudson Street as well as 550 Washington Street where the company signed a letter of intent to set up shop at Oxford Properties’ St. John’s Terminal redevelopment.
In all, Google’s move adds 1.7 million s/f of office space, and new offices are expected to begin being populated in 2020 and 2022 for the Hudson Street and Washington Street properties respectively.
“When we came to New York City almost two decades ago, it was our first office outside of California,” said Ruth Porat, senior vice president and chief financial officer of Google and Alphabet in a statement. “It’s now home to more than 7,000 employees, speaking 50 languages, working on a broad range of teams including search, ads, maps, YouTube, cloud, technical infrastructure, sales, partnerships and research.”
The latest announcement marks the second major push from tech companies looking to grow their presence in New York after Amazon announced in November that it plans to build a Long Island City headquarters for an additional 25,000 employees. Another 25,000 jobs will siphon into Crystal City, Virginia where Amazon said it plans to build yet another headquarters concurrently.
Unlike Amazon, which will take advantage of $3 billion worth of tax cuts for its Queens-bound headquarters, Google said it is not actively seeking any tax benefits for its expansion according to a report by the Wall Street Journal.
Already, Amazon has been at the center of backlash from both politicians and advocacy groups who say that the $768 billion company’s willingness to take advantage of incentives is exploitative.
Proponents are quick to point out that down the line, the move may produce as much as $27.5 billion in tax revenue — a claim echoed by Governor Andrew Cuomo, a major advocate for the plan.
According to Mark Chin, team leader of Keller Williams’ Tribeca office, controversy aside, the expansion of tech companies in New York will likely be an unequivocal boon for the housing market.
“Let’s be clear about what’s going on here,” said Chin. “There are winners and there are losers in real estate, and as time goes on, the cities that can produce talent are the ones that are winning.
“It’s the bodies that are going to drive the real estate market.”
Not many markets, Chin said, have the pool of workers necessary to support companies of scale. According to a report from the Brookings institution, in 2017, New York boasted 320,000 workers in the tech industry while the next closest city, Washington D.C. totaled around 263,000. San Francisco, much lauded for its tech sector, was fourth overall with 169,000 workers.
In Queens where the effects of Amazon’s entrance may have more geographically obvious residential impacts — immediate locales in Long Island City and Astoria are likely to see the biggest jump.
But for Google, the outcome may be more speculative.
According to Chin, developments in the West Village may stand to benefit from the influx, but costs could potentially box out earners that aren’t in the highest income bracket. As a result, more affordable markets up the 1,2,3, and A train lines in neighborhoods like Inwood could see some impact as well, Chin said. Rentals, he added, were most likely to be the major beneficiary.
The ultimate result of tech’s expansion throughout New York, however, is unclear. According to recent rental market reports from MNS and Douglas Elliman, the housing market in Queens has so far remained mostly static and though the numbers haven’t yet been realized, according to Chin, the zeitgeist is all but set in stone.
“It’s sort of the climate change thing; it’s slow, it’s gradual and then all of sudden it’s overwhelming,” said Chin. “There’s a tipping point that just hit. It only became fully apparent to us in the totality of what’s happening. With Amazon and Google, now it’s real, it’s on.”