Hudson Commons, a former warehouse, underwent a transformation in recent years, just in time for the surge in tech tenant interest in Manhattan’s Far West Side.
Cove Property Group and hedge fund the Baupost Group acquired the building at 441 Ninth Avenue for $330 million in 2016. The duo carried out an “adaptive reuse” plan that added 17 new office floors with outdoor terraces and higher windows.
In 2018, indoor-fitness firm Peloton inked a lease as an anchor tenant for its new headquarters, in a space six times the size of its previous Chelsea location. Ride-sharing firm Lyft signed a lease at the building a year later, a month before going public on Nasdaq.
Also in 2019, the developers refinanced the property with a $724 million loan from Blackstone, portions of which were then securitized into a number of CMBS deals. Documents associated with those transactions provide an inside look at the building’s finances.
As of June 2019, the 698,000-square-foot building was 66 percent leased to three office tenants and a restaurant, according to a loan prospectus.
Peloton, which takes up nearly half of the total space, has seen sales — and its share price — skyrocket amid the pandemic while second-largest tenant Lyft, and the ride-sharing industry in general, has struggled with a shrinking customer base.
Peloton occupies the ground floor and floors 4 through 11, Lyft occupies the 2nd and 3rd floors.
The third office tenant, with a much smaller space and the priciest rent per square foot, is Brevet Capital. The credit investment and specialty finance firm has been involved in more than $20 billion in transactions since 1998. Brevet’s office is on the 20th floor.
Amenities include a 15-car executive parking garage and two 56-person conference rooms that can be connected into one.
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The refinancing from Blackstone was used to return $186 million in equity to the borrowers, as well as to fund $74 million in future leasing costs and $18 million in capital improvements, according to the loan prospectus. The two-year loan has an initial maturity this December, but has three one-year extension options.
The area near Hudson Commons has been a hotbed of development and office leasing in recent years. One block south is Brookfield’s One Manhattan West, home to law firm Skadden Arps and accounting firm Ernst & Young. One block west is 601W Companies’ newly acquired 410 Tenth Avenue, redeveloped by SL Green Realty and anchored by Amazon. A bit farther west is Related Companies’ Hudson Yard megadevelopment, where Facebook agreed to take up 1.5 million square feet of office space in late 2019.