New York City’s Chelsea Market Trades for $2.4 Billion

John Jordan | March 2018

Chelsea Market Exterior View

NEW YORK—Goggle Inc., a major tenant at the property, has acquired the Chelsea Market here from Atlanta-based Jamestown for $2.4 billion.

Jamestown announced the closing of the transaction for the nearly 1.2 million square-foot complex on Tuesday. The former Nabisco factory occupies a full block bound by Ninth and Tenth avenues between 15th and 16th streets on Manhattan’s West Side. Reports of Google’s intended purchase of the property in the Meatpacking District surfaced last month.

Google reportedly occupies approximately one-third of the market’s space and purchased the adjacent 111 Eighth Ave. for $1.77 billion from Jamestown and partners in 2010. The 111 Eighth Ave. property now serves as Google’s New York headquarters.

Chelsea Market is perhaps best known for its ground-floor food hall, which is visited by more than 500,000 visitors per month. Jamestown will continue to manage the retail and food hall. Jamestown was represented by Doug Harmon, Adam Spies, and Kevin Donner of Cushman & Wakefield. Google was represented by Darcy Stacom of CBRE in the transaction.

“For Jamestown, this is the highest profile example to date of our unique approach to creating value, but it’s consistent with transformative projects we’ve successfully undertaken across the country,” says Michael Phillips, president of Jamestown. “It’s a combination of identifying underutilized locations, creative and visionary repositioning, value-creating management, rigorous financial analysis, and patience.”

The Chelsea Market redevelopment began in 1995 when real estate investor Irwin Cohen purchased the site in an attempt to create a new home for New York City’s flower district. In 2003, Jamestown purchased a 75% interest in Chelsea Market, further repositioning the site by reinforcing the food hall and focusing on attracting tech, media, and other creative tenants to the upper floors.

In 2011, Jamestown agreed to pay $225 million to buy out its partners—Angelo Gordon & Co., Belvedere Capital and Cohen, according to a report in the Wall Street Journal. The deal at the time valued the property at approximately $800 million.

In 2012, the city approved a 300,000 square-foot addition to Chelsea Market.

Over the last three decades, Jamestown has spearheaded a number of other notable adaptive reuse projects, including Industry City in Brooklyn, the Falchi Building in Queens, Ponce City Market in Atlanta, the Innovation and Design Building in Boston and Brunswig Square in Los Angeles.

Jamestown also maintains a headquarters office in Cologne, Germany, and also operates locations in New York, NY, Boston, MA, Washington, DC, San Francisco, CA, Los Angeles, CA and Bogota, Colombia.

In its announcement of the Chelsea Market deal on its website, Google notes that since its purchase of 111 Eighth Ave. eight years ago, the company has expanded its operations at Chelsea Market as well as at 85 10th Ave.

“This purchase further solidifies our commitment to New York, and we believe the Manhattan Chelsea Market will continue to be a great home for us and a vital part of the neighborhood and community,” states David Radcliffe vice president, real estate and workplace services for Google in the company’s announcement. “We’re proud to be part of a city that’s a cross section of so many industries and cultures, and as we look ahead to the next 18 years and beyond, we’ll continue to invest in our growth and commitment to the city.”

 

John Jordan
Editor, Real Estate In-Depth