Developer reportedly strikes $400 million financing deal that will fund a West Side skyscraper to house headquarters for luxury goods purveyor Coach Inc.
By Daniel Geiger
The Related Cos. reached a preliminary agreement in recent days to receive about $400 million in construction financing for a new office tower it is planning to build on the West Side rail yards, according to sources.
The lenders including Bank of America Corp. and JPMorgan Chase & Co., the sources said. The loan is seen as the last hurdle in beginning the 1.7 million-square-foot skyscraper, which is projected to cost about $1.2 billion and will kick off development at the 26-acre rail yards site known as Hudson Yards. Related is planning to build about $15 billion of mixed-use development there over the next decade.
Related, led by its chairman, Steve Ross, who is personally overseeing the site with another top Related executive, Jay Cross, has been in talks for months with luxury accessories company Coach Inc. to anchor the new tower in a 740,000-square-foot deal in which Coach would acquire its space as a condominium interest for roughly $500 million.
Coach's half-billion-dollar contribution to the project was why Related and its equity partners in the building, Oxford Properties and an unnamed United Arab Emirates sovereign wealth fund, need only $400 million in financing to break ground on the building, which will sit at the corner of 10th Avenue and West 30th Street.
Related has scrambled to begin the building after Coach placed a year-end ultimatum on the developer, according to a source with knowledge of the various players. Now,
Related is said to be talking to other tenants to take hundreds of thousands of square feet of space in the office tower, including the cosmetics company L'Oreal and German technology giant SAP.
"It's all about the tenants: How do you build on spec without a tenant like Coach in hand?" said Ronald Sernau, a real estate attorney at law firm Proskauer Rose who is not directly involved at the site. "It certainly sounds like the stars are finally aligned, Related has the financing and the tenant."
The building, for which an address has not yet been finalized, will sit on a section of the rail yards at grade level. The rest of the large site requires a costly platform to be constructed as a foundation over the working train yard below for the billions of dollars of office, residential, retail and public space Related is planning to build there.
A spokeswoman at Related would not comment, nor would a spokesman at Bank of America. JPMorgan could not be reached for comment. Coach did not immediately respond to a request for comment.
Tuesday, October 23, 2012
Stars align for Related, Coach, Hudson Yards
6 comments:
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and still, No Contract executed to date. It seems the not ready for prime time players ineptitude, excuses & delay is clear for all to see.
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