Google buys old Port Authority, NYC fiber hub for $1.9 billion

Google buys old Port Authority, NYC fiber hub for $1.9 billion

Summary: Even for Google, $1.9 billion for an NYC landmark 50% bigger than the Empire State Building is hardly loose pocket change.

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TOPICS: Google, Networking
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That's right, I said billion. Google has actually been the largest tenant at the the old Port Authority building on 111 Eighth Avenue on the city's West Side for some time now (they began leasing space in 2006), but closed a deal Wednesday to purchase the 3 million square foot building. While the $1.9 billion purchase price is hardly a steal, Google is most likely more interested in the fiber sitting under the building as it is in the real estate.

As Wired described it,

111 Eighth Avenue is no ordinary humongous building. As it happens, the structure sits almost directly on top of where the Hudson Street/Ninth Avenue fiber highway makes a dog-leg to the right before heading north-east toward the Upper West Side.

In New York City, fiber-optic cables travel in large bundles underneath the asphalt.

Thus, 111 Eighth Avenue has become known as one of the most important so-called telecom carrier hotels on the Eastern seaboard, if not the entire United States.

Handy for Google to own that, don't you think?

For its part, Google took a bit different approach in describing the property acquisition in a blog post Wednesday:

We believe that this is a great real estate investment in a thriving neighborhood and a fantastic city.

Like the city, our New York office is a melting pot of cultures and ideas—it’s home to Googlers from more than 35 countries who speak more than 40 languages. They live in the five boroughs and spread across the tri-state area. We’re excited to continue to build our presence there.

If making one of the largest real estate deals in New York history counts as "building their presence", then they certainly have reason to be excited. While Google intends to allow the existing management company to continue handling the daily operations and dealings with the other current lessees, one has to wonder what the next few years will hold as those leases expire.

With such prime access to New York's extraordinary data pipes and a cash purchase through which the city of New York made $46 million in transaction taxes alone, there is definitely more to this deal than the need for office space. 111 Eighth Avenue, after all, has half again the square footage of the Empire State Building and Google now owns it.

Merry Christmas, Google.

Topics: Google, Networking

Christopher Dawson

About Christopher Dawson

Chris Dawson is a freelance writer, consultant, and policy advocate with 20 years of experience in education, technology, and the intersection of the two.

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22 comments
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  • About that fiber...

    Does owning the building over it give them any more access or rights to control it? Or is it just coincidence?
    gtvr
    • RE: ...give them any more access or rights to control it?

      @gtvr

      I look at this purchase in the same context of a gas station operator looking to buy (or lease) a gas station - Location.

      A site right off the (busy internet) highway is more preferable to one located a mile away, isn't it?

      Strategically, it makes a lot of sense when you can plug directly into the internet backbone.
      fatman65535
      • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

        @fatman65535 Yeah cheaper to tap straight in than to lay more fibers to your data center.
        m3kw9
  • No doubt in my mind now.

    Google management has its eye on vertical integration in cyberspace, owning datacenter, backbone, and ISP last mile assets in key geographies. They'll have excellent coverage of the NY/NJ local access market as well as the best backbone connections on the East Coast. Look for similar moves in Virginia, Atlanta, Dallas, Denver, and other high-volume high-tech hubs.

    But there are some big obstacles: the incumbent telcos and cablecos practically have local regulators on the payroll. Google will have to dedicate some of that huge office space to lawyers, lobbyists, and bagmen if they really want to crack the NY/NJ local market.
    terry flores
    • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

      @terry flores Google already have those people on their payroll. It's not an issue for them.
      m3kw9
  • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

    Does this mean they now own that fiber under the building? I wonder how hard would if be for Google to install a "toll booth" on all that fiber? How does net neutrality plays out with this? No company would spend that kind of cash unless there's a buck to be made.
    bobmatch@...
    • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

      @bobmatch@... If google wants to have some sort of data processing center for the US, they can tap straight in without laying more cables and in less time.
      m3kw9
    • "He who controls the spice..."

      @bobmatch@...
      John Zern
      • Spice/Splice

        @John Zern--Or is it, '"He who controls the splice..."?
        PreachJohn
  • Get serious

    [i]Thus, 111 Eighth Avenue has become known as one of the most important so-called telecom carrier hotels on the Eastern seaboard, if not the entire United States. Handy for Google to own that, don?t you think?[/i]

    What does Google actually own? They're in no way allowed to tamper or connect to any of that fibre without permission.

    [i]If making one of the largest real estate deals in New York history counts as ?building their presence?, then they certainly have reason to be excited[/i]

    Look, we know you're a cheerleader for Google, to the point you even make excuses for them anymore, but this really doesn't even come close to being "one of the largest real estate deals in New York history".

    IMHO, I think Google believes that they are so loved they'll be able to control the information thru those pipes for no other reason then they own the room they sit in, and no one will bat a eye.

    Like you, I don't think Google reads the news outside their own web site.
    AllKnowingAllSeeing
    • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

      @AllKnowingAllSeeing Google can tap in once it gets permission, surely.
      m3kw9
  • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

    I agree with AllKnowingAllSeeing -<br><br>Its highly suspect that Google now owns a site with a major fiber hub underneath it. Tell me a better way to control all the information flowing through those pipes? "Permission" is a joke when you own the property. <br><br>Google is the most unethical company out there who operates under the guise of "wonderful Google" when put to the privacy test . . .
    twwol
    • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

      @twwol all co's are unethical. Otherwise don't start one.
      m3kw9
      • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

        @m3kw9 The only reason Google is popular is they are the first real challenger to Microsoft and have been able to put Microsoft on the back foot. Microsoft had this same level of popularity when they did the exact same thing to IBM in the 90's. Googles time in the sun is now but they will will be usurped on day...maybe 10-15 years from now when the next company puts them in them on the back foot once they have pissed off enough people.
        global.philosopher
    • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

      @twwol Google has a comprehensive privacy page that you should read. They are no worse than any telco.. Example: US government ordered AT&T to monitor their users and they complied without any second thoughts...
      prof123
  • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

    Its not just the line underneath the building. Its all the telco tenants (an equipment) inside. From my recollection, this is the number one hub of all local data fiber in NY. Plus it contains POPs of all the major network providers. In other words this is huge.
    30otnix
  • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

    I suspect that Google wants access to the dark fiber. Having access to a hub in NYC gives them a direct pipe to and from their data centers. Telco's would love to lease out dark fiber. And owning a building does not give you the rights to the fiber running under it. Telcos normally have very long leases on the space they use.
    NirodacYar
  • Al-Queerda take note.

    Huh. Looks like that Times-Square bomber was off by a couple of blocks.
    I wonder if Al-Queerda will take note of all the valuable info you have just given above.
    PercySludge
  • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

    Hey I take the bus to NYC sometimes. Ya think Google could maybe reduce Greyhound's rent in the building, and thus reduce the price of my bus ticket?
    Or will they improve the service of my Greyhound wifi (already free)....
    PercySludge
  • RE: Google buys old Port Authority, NYC fiber hub for $1.9 billion

    Google bought the data center and telecom facilities in the building or at least the real estate that the owners want to use to house their data centers. That's all they needed. Just like telco consolidations, the customers come along for the ride.
    awilson77584