The Real Deal New York

Coach demands rival-free Hudson Yards – and Related agrees

At least eight stores, including Polo Ralph Lauren, are not welcome in South Tower

September 16, 2013 12:25PM

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South Tower rendering (credit: Kohn Pedersen Fox) and Coach

Related Companies has Coach as an anchor at its Hudson Yards mega-project because it signed off on a demand not to lease any space to competitors of the handbag heavyweight. Coach made the no-competitor condition after it bought 740,000 square feet in the development’s Tower C, or the South Tower.

Related heard from Coach after L’Oreal grabbed 402,000 square feet of the 1.7-million-square-foot building. The lease rider prohibits Related from leasing office or retail space to at least eight competitors, including Polo Ralph Lauren Corp., J. Crew Group and Burberry Group.

Starwood Property Group provided $350 million in funding for the skyscraper, at 31st Street and 10th Avenue. Oxford Properties Group, the trade union United Brotherhood of Carpenters and Joiners, and Coach paid the balance, as previously reported. [WSJ]Mark Maurer

  • VPERS

    Whats does this tell you?
    Is Coach such a desirable?
    Is Hudson Yards a Tenant market?

    • RetailMaven

      Great point, but if Related is so desperate why would they block so many other potential tenants. My fear is that it’s going to be Coach and a bunch of pizza and coffee shops.

      • VPERS

        I am not a retail maven but is having Coach worth it to make such a deal with early in the game?
        Which other tenants follow Coach that might follow them here?
        Related is their landlord at TWC, (as well as J. Crew)I wonder what the thought process was here.

        • VPERS

          Just as a note. Its seems that this agreement restricts and is limited to a single building.

  • SunnyD

    Kinda dumb on Coach’s part. I, for one, prefer to shop where there are multiple retail options. It’s a big time-saver. Who’s gonna schlep to the faaaar West side, just to go to Coach?!

    • WrteStufLA

      The “no compete” isn’t for retail space, but for corporate HQ/office space. Doubtful that even Coach will have a retail outlet there.

      • VPERS

        “The lease rider prohibits Related from leasing office or retail space to at least eight competitors, including Polo Ralph Lauren Corp., J. Crew Group and Burberry Group.”

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