Luxury brand Coach Inc. is said to be marketing its 40 percent interest in 10 Hudson Yards – the first skyscraper that will be completed at Related Cos.’ Hudson Yards megadevelopment on Manhattan’s Far West Side.
While Related and partner Oxford Properties Group will maintain their stakes in the 1.7 million-square-foot tower, Coach – the office building’s anchor tenant – is looking to sell its interest in the property, Bloomberg reported.
While declining to identify the seller of the stake, Related CEO Jeff Blau said in an interview with Bloomberg that one of the tower’s sovereign wealth investors plans to recapitalize its position at the 52-story tower.
Coach paid $530 million for its 738,000-square-foot portion of 10 Hudson Yards, according to Real Capital Analytics data cited by Bloomberg. The building is more than 90 percent committed and is likely to be fully leased in the coming weeks, Blau said.
The recapitalization allows Coach an opportunity to profit off its early investment in the property, with the handbag maker planning to lease back its offices at 10 Hudson Yards as part of the sale of its interest.
Eastdil Secured, led by senior managing director Doug Harmon, is marketing the stake on behalf of the building’s ownership group.
“We are committed to our move to the new Coach building at 10 Hudson yard and a long-term lease would be part of any transaction,” a Coach spokesperson said.
Related expects to have a deal in place for the building’s 40 percent interest in January and have it closed by June, when the skyscraper is set to be completed.
Blau told Bloomberg that the recapitalization was planned all along at 10 Hudson Yards, the centerpiece of one of the most complex construction financing deals in city history.
Starwood Property Group led the origination of a complex $475 million construction loan at 10 Hudson Yards. Barry Sternlicht’s firm provided $350 million in funding while Oxford, United Brotherhood of Carpenters and Jointers and Coach picked up the balance.
“Starwood’s thinking was, ‘If they [Related/Oxford] screw up the first one, they screw up the entire project, so how can they not finish the building?’” adviser Jeffrey Lenobel, of Schulte Roth & Zabel, told The Real Deal in 2013. [Bloomberg] – Rey Mashayekhi