Here’s what tenants pay at the redeveloped Hudson Commons

Cove Property and Baupost’s Far West Side complex home to Peloton HQ and Lyft

New York Insights /
Mar.March 15, 2021 07:00 AM
Cove Property Group’s Kevin Hoo, Baupost Group’s Seth Klarman and Hudson Commons. (Cove, Hudson Commons, Getty)

Cove Property Group’s Kevin Hoo, Baupost Group’s Seth Klarman and Hudson Commons. (Cove, Hudson Commons, Getty)

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.

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.





    Related Articles

    arrow_forward_ios
    (Image by Wolfgang & Hite via Dezeen)
    Hudson Yards megadevelopment inspires a new line of sex toys
    Hudson Yards megadevelopment inspires a new line of sex toys
    The Observation Deck at Hudson Yards (Credit: Adam Pogoff)
    Views from 1,100 feet: A tour of Related’s “the edge,” the tallest outdoor observation deck in the Western Hemisphere
    Views from 1,100 feet: A tour of Related’s “the edge,” the tallest outdoor observation deck in the Western Hemisphere
    Facebook CEO Mark Zuckerberg and Hudson Yards (Credit: Getty Images and Wikipedia)
    Facebook close to finalizing Hudson Yards office deal: report
    Facebook close to finalizing Hudson Yards office deal: report
    Silverstein Chairman Larry Silverstein, CalSTRS CEO Cassandra Lichnock and 1177 Sixth Aveneut (Silverstien, Getty, CalSTRS)
    $450M refi reveals what tenants pay at Silverstein’s 1177 Sixth Avenue
    $450M refi reveals what tenants pay at Silverstein’s 1177 Sixth Avenue
    KKR chairman Henry Kravis, 30 Hudson Yards and Related Chairman Stephen Ross (Getty)
    KKR buys Hudson Yards observation deck for $500M
    KKR buys Hudson Yards observation deck for $500M
    Radson Development co-founder Jacob Rad and the site of the development (Google Maps, LinkedIn via Rad)
    Pair of mixed-use towers to rise at site of Hell’s Kitchen slaughterhouse
    Pair of mixed-use towers to rise at site of Hell’s Kitchen slaughterhouse
    Hudson Yards (Getty, iStock)
    City’s bet on Hudson Yards beginning to pay off
    City’s bet on Hudson Yards beginning to pay off
    Peebles, Witkoff plan Hudson Yards supertall
    Peebles, Witkoff plan Hudson Yards supertall
    Peebles, Witkoff plan Hudson Yards supertall
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...