- Coach said to offer its stake and lease back its offices
- Related, Oxford Properties to stay 10 Hudson Yards owners
A 40 percent stake in 10 Hudson Yards, the first skyscraper set for completion at the development on Manhattan’s far west side, is being marketed for sale.
Related Cos., which is leading the $20 billion, 28-acre (11-hectare) Hudson Yards development, and partner Oxford Properties Group will maintain their stakes in the 1.7 million-square-foot (158,000-square-meter) tower, Related Chief Executive Officer Jeff Blau said in a recorded Bloomberg Television interview set to broadcast Friday. Coach Inc., the handbag maker who is the building’s anchor occupant, is selling its interest, said a person with knowledge of the matter.
While Blau wouldn’t identify who’s selling the 40 percent interest, he said one of the tower’s sovereign wealth investors plans to recapitalize its position.
“This was always part of the original plan,” Blau said in a separate interview. “It was always our intent to stabilize the building and then recapitalize.”
The 52-story tower is more than 90 percent committed, he said, having announced on Thursday an agreement for Boston Consulting Group to take 193,300 square feet, and is likely to be fully leased in the next few weeks. The sale will offer investors their first opportunity to take a position in a completed piece of the project.
“We are, collectively with the owners, the first to be offering a rare and incredibly valuable front-row seat in 10 Hudson Yards,” said Doug Harmon, senior managing director at Eastdil Secured LLC, who is marketing the stake and last month arranged the sale of Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, to a partnership led by Blackstone Group LP.
Coach, which in 2013 paid $530 million, or $718 a square foot, for its 738,000-square-foot portion of the tower, according to property-research firm Real Capital Analytics Inc. The recapitalization offers it an opportunity to profit off its early investment. Coach intends to lease back its offices as part of the sale of its interest, said the person, who asked not to be identified because the details are private.
“Coach has long noted that we believe our investment in Hudson Yards would be monetizable over time,” spokeswoman Andrea Shaw Resnick said in an e-mail. “We are committed to our move to the new Coach building at 10 Hudson Yards and a long-term lease would be part of any transaction.”
Blau said he plans to have a deal in place in January, and have it completed by June, when the skyscraper should already be complete. Other tenants include L’Oreal USA, SAP AG and VaynerMedia.
“The new investor would be buying into a fully stabilized building,” he said.
Coach was the first company to commit to space at Hudson Yards, in 2011. Related’s portion is the centerpiece of a plan put in place by former Mayor Michael Bloomberg to extend the Midtown business district west to the Hudson River, with Related building mostly over the Metropolitan Transportation Authority train yards west of Pennsylvania Station. Bloomberg is founder and majority owner of Bloomberg LP, parent of Bloomberg News.
The 10 Hudson Yards tower is at the southeast corner of the site, at 10th Avenue and West 30th Street, on a part of the site which didn’t require a platform because it was on solid ground. Related also is building 30 Hudson Yards, which will house the new headquarters of Time Warner Inc. Buyout firm KKR & Co. last month agreed to buy 343,000 square feet in that 90-story tower, which will be the tallest building in the complex. Blau said that tower also is approaching full occupancy.