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Posted Jul 22, 2015, 7:45 PM
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N40° 46.8925', W073° 57.3
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Join Date: Mar 2013
Location: New York, NY
Posts: 300
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Related's Hudson Yards development close to full occupancy
Boston Consulting Group is close to taking the remaining 75,000 square feet of space at 10 Hudson Yards.
http://www.crainsnewyork.com/article...full-occupancy
Quote:
Related Cos. is in talks with Boston Consulting Group Inc. to lease space at 10 Hudson Yards, a deal that may pave the way for a partial sale of the tower rising on Manhattan's far West Side, a person with knowledge of the developer's plans said.
An agreement for about 175,000 square feet would fill almost all the remaining space at the building, the first slated to be completed at Related's $20 billion Hudson Yards project, said the person, who asked not to be named because the talks are private. Boston Consulting, which advises an array of corporate clients, has its New York offices at 430 Park Ave.
The company would join Coach Inc., SAP SE, and L'Oreal USA in the 52-story, 1.7 million-square-foot property, which is scheduled to be completed early next year. The tower is on the southeast corner of the 28-acre Hudson Yards site, where Related is transforming a former industrial area in what it calls the biggest private real estate development in U.S. history.
With the building fully leased, Related may consider selling at least a portion of its stake in 10 Hudson Yards, the person said. A sale would allow Related and its equity partner, Oxford Properties Group, to capitalize on the value they've created with the building, giving them cash that could be used to finance further construction at the site, the person said.
Coach, the luxury-handbag maker, owns 738,000 square feet in the tower, for which it paid $530 million in 2013, Real Capital Analytics Inc., a research firm that tracks commercial- property sales.
Investor demand
A sale "would be one of the high-profile deals for New York for this year, if it goes through," said Jim Costello, senior vice president at Real Capital. "There's certainly demand for such high-quality assets."
New York is awash in capital from domestic and foreign investors seeking stakes in high-rise buildings with steady cash flow, Mr. Costello said. A sale at Hudson Yards would give Related and its partners an opportunity to get a quick return on their investment rather than waiting for rents to start rolling in, he said.
Related's spokeswoman, Joanna Rose, declined to comment on lease negotiations or the possibility of selling its portion of 10 Hudson Yards.
The first half of 2015 was the biggest on record for sales of New York commercial properties, with $29.4 billion of completed deals and $8.4 billion under contract, brokerage Jones Lang LaSalle Inc. said in a report this month.
Times Square
The sale in February of a 45% stake in 11 Times Square—a 1.1 million-square-foot tower completed in 2010—may be a rough guide for bids 10 Hudson Yards might attract, according to Costello. Norway's sovereign-wealth fund, Norges Bank Investment Management, paid $1,272 a square foot, he said. The tower was about 85 percent occupied at the time.
Boston Consulting has about 96,500 square feet at 430 Park Ave., where it has been since 2002, according to data from research firm CoStar Group Inc. The Boston-based company, which serves industries from automobiles to education to retail, also subleases offices from Credit Suisse Group AG at 315 Park Ave. South, in an agreement that expires in April 2017.
Madeleine Desmond, a Boston Consulting spokeswoman, declined to comment on leasing matters. A call to Midwood Investment & Development, the company that controls 430 Park Ave., wasn't returned.
The tower at 10 Hudson Yards, designed by the architecture firm Kohn Pedersen Fox, sits near the northern end of the High Line. The building straddles a portion of the elevated park, once an abandoned train trestle.
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That's a quick return of investment for Related.
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