Related, Oxford Secure $1.6B Debt in Hudson Yards

For large office developments, it’s critical to have an anchor tenant and construction financing. Months after securing the former, Related Companies and Oxford Properties Group landed the latter in Hudson Yards.

Related and Oxford scored $1.6 billion in construction financing for their 72-story office tower project at 70 Hudson Yards, Bloomberg reported. The partners subsequently completed a $2.45 billion recapitalization of the development, according to a statement.

Wells Fargo, Bank of America and Standard Chartered underwrote and structured the construction debt. Institutional investors also provided equity for the development.

Related and Oxford broke ground on the project in July and anticipate opening the building to tenants by the end of 2028. Top floor leasing is expected to start this year.

The 1.4-million-square-foot development represents the nation’s largest ground-up office development since the onset of the pandemic more than a half-decade ago. Amenities will include an event space, private dining, a media-podcast studio and “red eye” suites for use after flights.

Last spring, accounting and consulting firm Deloitte agreed to lease 800,000 square feet at the property before it broke ground. The space, which includes an 8,000-square-foot terrace, will serve as North American headquarters for the company.

The developers are banking on interest from other tenants looking for high-quality office spaces. Judging from leasing activity in Manhattan last year, they should be feeling confident.

Manhattan was on track last month to surpass 40 million square feet worth of deals for the year, which would be the first time it crossed that threshold since 2019. Manhattan office availability came down to 14.2 percent in December, according to Colliers, the lowest rate since late 2020.

There were even a couple of leases last year that cracked the 1-million-square-foot mark; Deloitte’s deal at 70 Hudson Yards was the year’s third-largest lease in the borough.

— Holden Walter-Warner