The Real Deal New York

Allianz buys 44% stake in 10 Hudson Yards

Deal replaces Coach Inc.'s stake and values tower at $2.15B

August 02, 2016 08:31AM

Hudson Yards on the Far West Side and Allianz’s Christoph Donner

One of Europe’s largest insurers has acquired a 44 percent stake in 10 Hudson Yards for $420 million and part of a $1.2 billion mortgage, buying out retailer Coach Inc.’s stake in the Far West Side tower.

The deal with Allianz SE, headquartered in Germany, is part of a recapitalization of the 52-story tower and values the property at $2.15 billion. Allianz’s acquisition also included part of a stake held by the Kuwait Investment Authority. Allianz was part of a group that took on a $1.2 billion mortgage, including Deutsche Bank and Goldman Sachs, developers Related Companies and Oxford Properties Group said.

10 Hudson Yards, which houses Coach, L’Oréal USA, SAP, The Boston Consulting Group, VaynerMedia, Intersection and Sidewalk Labs, opened earlier this year.

Coach, which paid $750 million to buy its 740,000-square-foot office condo at 10 Hudson Yards, was reportedly shopping its stake in the property in recent months. The retailer was paid $707 million in the Allianz deal, and it simultaneously signed a 20-year lease for its Hudson Yards headquarters, the company said.

“We are very pleased to monetize our investment in Hudson Yards, where we were the first company to commit to the project and will be the largest tenant in the new building,” said Coach CEO Victor Luis.

In an interview with Bloomberg, Chris Donner, CEO of Allianz Real Estate of America TRData LogoTINY, said the insurer planned to hold the investment for at least 10 years despite a choppy market.

“When we started speaking to partners about this deal there was volatility, especially on the financing side,” Donner said. “We are seeking to invest for the long term and we are not as concerned about immediate volatility.”

Eastdil Secured’s Doug Harmon represented Coach in the deal.

Related plans to launch residential sales at Hudson Yards this fall.

Related and Oxford last week scored a $1.2 billion loan to build neighboring 35 Hudson Yards. The Children’s Investment Fund, a U.K.-based hedge fund, provided the debt for the 1,000-foot tall mixed-use tower. The loan covers part of the tower’s $2 billion price tag, which is also being financed through an undisclosed equity investment. — E.B. Solomont

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