The Real Deal New York

Peloton spinning toward new headquarters on Far West Side

Indoor-cycling startup negotiating for more than 300K sf at Cove Property’s 441 Ninth Avenue
By Rich Bockmann | November 02, 2018 03:00PM

441 Ninth Avenue and a trainer on a Peloton bike (Credit: Cove Property Group and Peloton)

Peloton Interactive, the $4.15 billion indoor-cycling startup, is spinning toward a new headquarters that’s just a short ride away from the flagship fitness studio it’s opening at Manhattan West.

The six-year-old company is close to finalizing a deal to anchor Cove Property Group’s 700,000-square-foot Hudson Commons office redevelopment at 441 Ninth Avenue, sources told The Real Deal.

The exact square footage of the lease wasn’t immediately clear, but sources said it could be in the range of 300,000 to 350,000 square feet. Representatives for Cove and Peloton declined to comment.

Sitting at the corner of Ninth Avenue and West 34th Street, Hudson Commons is within walking distance of Brookfield Property Partners’ Manhattan West megaproject, where Peloton earlier this year signed a lease for a 35,000-square-foot fitness studio that will offer classes for indoor cycling, running, boot camp and strength training.

The studio is expected to open next fall, and the lease earned a Real Estate Board of New York “Most Ingenious Retail Deal of the Year” award for the JLL team of Patrick Smith, Matt Ogle, Corey Zolcinski and Bob Gibson representing Brookfield, as well as Peloton’s broker, Benjamin Birnbaum at Newmark Knight Frank.

Ben Shapiro at Newmark Knight Frank is representing Peloton in the lease at Hudson Commons, and declined to comment.

Peloton, meanwhile, completed a $550 million funding round in August valuing the company at $4.15 billion, and has big plans for expansion.

The SoulCycle competitor will be relocating its offices from 125 West 25th Street in Chelsea, owned by the Swiss pension fund AFIAA, where it occupies more than 50,000 square feet.

Cove, headed by Savanna alumnus Kevin Hoo, teamed up with the hedge fund Baupost Group in late 2016 to pay $330 million to buy 441 Ninth Avenue from the health insurer EmblemHealth, which occupied the former eight-story warehouse as its offices.

The property benefitted from the city’s 2005 rezoning of the Hudson Yards neighborhood, and Cove is close to finishing work on renovating the existing portion of the building and constructing 17 additional floors of tower office space on top.

Apollo Global Management last November gave Cove and Baupost a $479 million construction loan, refinancing at $220 million loan Deutsche Bank provided at the time of acquisition.

The project, which is scheduled for occupancy before the end of next year, is designed by Kohn Pedersen Fox, the architects behind the first two office towers at Related Companies and Oxford Property Group’s Hudson Yards project and SL Green Realty’s One Vanderbilt.

Scripps Networks Interactive had put the property on its shortlist for a new headquarters in Manhattan, but ultimately decided to go to TF Cornerstone’s 230 Park Avenue South.