New York City’s elite $2 billion club of trophy office buildings is gaining a new entrant. The property’s buyer, however, has been just outside the club door for some time.

Google’s massive pending purchase of the Chelsea Market building at 75 Ninth Avenue would make the property the fifth in the history of Manhattan to cross the $2 billion threshold in an outright sale. The Real Deal first reported Tuesday that the deal was in contract. It is expected to close in two months.

The four other properties in that set are the GM Building at 767 Fifth Avenue ($2.8 billion, or $1,400 per square foot), 11 Madison Avenue ($2.3 billion, or $973 per square foot), 3 Bryant Park ($2.2 billion, or $1,875 per square foot) and 245 Park Avenue ($2.2 billion, or $1,127 per square foot). TRD excluded partial-stake deals for the purpose of this analysis.

Though the exact price of the Chelsea Market deal was not immediately clear, sources familiar with the negotiations have since pegged it around $2.4 billion. If that holds, the deal would not only be the second-priciest building sale in city history but would also boast the highest price per square foot – an astronomical $2,000 – among its cohorts in the $2 billion club.

The price per foot is even more significant when contrasted with Google’s last big New York real estate deal – the $1.77 billion purchase of the 2.9 million-square-foot office building at 111 Eighth Avenue in 2010. The price per foot closed at $610. Although the market was sluggish and just beginning to recover, the deal became one of the largest New York City trades ever in terms of dollar volume. The price per foot for 111 Eighth is nearly one-third of the Chelsea Market deal, and we’re again witnessing a slow market.

But the striking differences in price don’t surprise some. “Look at Google’s share price and market cap in 2010 versus now,” said Eric Anton, an investment-sales broker at Marcus & Millichap who was not involved. He added there are only a handful of tech behemoths who can pull off real estate deals like Google has done in New York, and therefore a bigger owner-user trend here is unlikely.

Zev Holzman, a tenant-representation office-leasing broker at Savills Studley who was also not involved in the deal, said “Eight years is an eternity. These are very different times and points in the market.”

Representatives for neither Jamestown nor Google could be reached for comment.

The figure also speaks to how much the 1.2 million-square-foot Chelsea Market building has appreciated since the seller, Atlanta-based Jamestown, bought out its partners in 2011 valuing the property at $800 million. In less than seven years, the building appears to have tripled in value. (Also staggering is the property’s appreciation since Chelsea Market developer Irwin Cohen paid about $10 million for the foreclosed mortgage debt in the late 1990s.) In the past two years, Jamestown sought to invest between $35 million and $50 million to expand the building’s retail.

In addition to the other leases Google has in Chelsea, the company has significant room to grow at 75 Ninth. The property comes with an extra 300,000 square feet of air rights and, after other office tenants vacate the building, that space would be fair game. The purchase is not expected to directly affect the popular Chelsea Market food hall.

Welcome to Chelsea, corporate America

The deal also marks a rare monster investment sales trade in Chelsea. The neighborhood is part of the booming Midtown South office submarket for office leasing, but has always been less prestigious than Midtown in terms of big-ticket investment sales.

“It’s emblematic of the current state of Midtown South,” Holzman said. “There is a severe shortage of large-floor-plated buildings, and the few that do demand a premium. This further solidifies it as a neighborhood for corporate America.”

Aetna, for example, leased 145,000 square feet a block south at Vornado Realty Trust and Aurora Capital Associates’ 61 Ninth Avenue, though its plans to move in fell apart after CVS acquired the health insurer.

While not in the same league as the two Google deals, other Chelsea office buildings have traded hands in recent years. Swiss fund AFIAA picked up Normandy Real Estate Partners’ 119-125 West 25th Street for $906 per square foot ($125 million) in 2016, and Savanna paid $872 per square foot (or $126 million) for 31-35 West 27th Street last year.

With at least $4 billion in New York real estate acquisitions alone, Google is increasingly being taken seriously as a New York owner. Anton said that gives them the buying power to further transform the market.

“Behemoths like to create their own private environments,” Anton said. “They may spend on a fortune on an amenity floor that other landlords wouldn’t even consider.”

The splashiness of the purchase may also lead to other challenges for the tech giant in the public eye.

“There’s talk in the media of concerns about the power of Google and others, to the point of calling them monopolies,” Anton said. “And now a company like Google brings even more scrutiny by buying Chelsea Market. That’s an amazingly high-profile move, but it also further engrains this idea people have of the ‘evil empire.’”