Thursday, October 25, 2012

Hudson Yards Tower Ready to Break Ground

The Related Cos. has reached an agreement in recent days for more than $400 million in construction financing for the new Coach Tower it is planning to build on the West Side rail yards. The loan is seen as the last hurdle to breaking ground on the 1.7 million-square-foot skyscraper, which is projected to cost about $1.2 billion and will kick off development at the 26-acre rail yards site known as Hudson Yards. Related is planning to build about $15 billion of mixed-use development there over the next decade.

Related has been in talks for months with luxury accessories company Coach Inc. to anchor the new tower in a 740,000-square-foot deal in which Coach would acquire its space as a condominium for roughly $500 million.

Coach's half-billion-dollar contribution to the project was why Related and its partners in the building need only $400 million in financing to break ground on the building, which will sit at the corner of 10th Avenue and West 30th Street.

The name of the project will be 501 West 30th Street.

Related has scrambled to begin the building after Coach placed a year-end ultimatum on the developer, according to a source with knowledge of the various players. Now, Related is said to be talking to other tenants to take hundreds of thousands of square feet of space in the office tower, including the cosmetics company L'Oreal and German technology giant SAP.

"It's all about the tenants: How do you build on spec without a tenant like Coach in hand?" said an unnamed executive involved with the project. "It certainly sounds like the stars are finally aligned: Related has the financing and the tenant."

The building will sit on a section of the rail yards at grade level. The rest of the large site requires a costly platform to be constructed as a foundation over the working train yard below for the billions of dollars of office, residential, retail and public space Related is planning to build there.

[See ElectricWeb | Blogger, Oct 10, 2012]