Developer seeks $1B+ for West Side tower Hudson Commons

Peloton and Lyft are anchor tenants at 700K sf building

Cove Property Group's Kevin Hoo and 441 Ninth Avenue (Cove Property Group)
Cove Property Group's Kevin Hoo and 441 Ninth Avenue (Cove Property Group)

The New York City office market is about to witness a test of confidence in its post-Covid resurgence.

Cove Property Group, working with CBRE, is looking to sell Hudson Commons, its building at 441 Ninth Avenue near Hudson Yards, for over $1 billion, according to Bloomberg. The 700,000-square-foot property is more than 75 percent leased.

Anchor tenants at the recently redeveloped asset include Peloton and Lyft. It is among the few LEED Platinum office buildings in the city and stands 25 stories tall.

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Cove Property Group and the Baupost Group acquired the edifice in 2016 for $330 million. The partnership’s plan included adding 17 office floors with outdoor terraces and higher windows. In 2019, the developers refinanced the property with a $724 million loan from Blackstone.

The city’s office market has struggled during the pandemic as remote work took hold. The Delta variant is threatening its recovery, as office returns have been delayed as municipalities try to get the Covid surge under control. Last month, the Manhattan office availability rate was 17.1 percent, while asking rents were at the lowest point in years.

Still, buyers and lenders are still largely banking on a rebound. Last month, AEW Capital Management purchased a part-new, part-renovated boutique office building in Soho for $86.2 million. An office tower in the Garment District owned by L.H. Charney Associates recently received a $148 million refinancing.

[Bloomberg] — Holden Walter-Warner