Google buys New York office building for $1.9 billion

Google is continuing to invest heavily in property, announcing a deal to buy a building in New York rumoured to be valued at $1.9 billion (around £1.23 billion, if you define a billion as one thousand million).

Although Google's official announcement coyly refuses to discuss the money involved, the company is thought to be paying $1.9 billion to purchase its New York office building at 111 Eight Avenue, or 76 Ninth Avenue, depending on which entrance you use.

The building is being purchased from current owners Taconic Investment Partners, Jamestown Properties and the New York State Common Retirement Fund. Although Taconic Management Company retains its role in the management of the building, Google is now the outright owner.

However, Google isn't expected to start evicting the building's other tenants just yet. Instead, it's using the deal to minimise its operational costs, while generating useful income from leasing portions of the building that it doesn't need yet. This is a strategy that David Radcliffe, vice president of real estate and workplace services at Google, describes as 'a great real estate investment in a thriving neighbourhood and a fantastic city.'

If the $1.9 billion purchase figure, quoted by The Wall Street Journal and others, proves true, then it's a major coup for Taconic, which paid a mere $300 million for the property when it acquired it in 1998.

Do you think Google has made a shrewd investment decision, or is it getting spend-happy as the year draws to a close? Share your thoughts over in the forums.