Finally, Coach is near to bagging a new HQ
An agreement with high-end handbag maker Coach to anchor the first office tower set to rise at the Hudson Rail Yards west of Penn Station is on the verge of being signed, sources involved in the transaction said. The news comes nearly a year and a half after talks first began for the deal under which Coach will acquire its new 740,000 square-foot home in the 47-story, 1.7 million-square-foot building as a condominium interest. Coach will pay developer The Related Cos. over $750 million, according to a source with direct knowledge of the transactions terms. The deal cements the financial viability of the first tower at the rail yards, where ground was broken in December. The Coach building will be the first of many that Related plans to erect at the 26-acre site. All told, the project is expected to cost $15 billion and to add more than 13 million square feet of commercial, retail and residential space. In the coming days, according to a Related spokeswoman, the company will also close on a 99-year, $1-billion lease with the Metropolitan Transportation Authority, which owns the site. Related first entered into contract with the agency in 2010 but has delayed closing as it has worked to line up tenant commitments to the project. The Related spokeswoman would not comment on the Coach deal. A Coach spokeswoman also declined comment. The Coach tower will rise at the southeast corner of the yards, a logical place to begin building as the site is located on solid ground. Construction on the remainder of Related's site will rise on a huge deck that will be built over the still active rail yards at a cost of $1 billion. Related's lease at the site would require it to build that key piece of infrastructure, though work has to begin. The deal with Coach is the first of at least three set to be completed at the building. The German software company SAP and the cosmetics company L'Oreal are both in advanced negotiations to lease hundreds of thousands of square feet apiece, commitments that would fill roughly 80% of the tower. A source said that those deals would now progress towards completion now that the Coach deal is done. Mary Ann Tighe, the New York area CEO of CBRE Group Inc., represented Coach in the lengthy and complex transaction. A CBRE Group Inc. team also represents Related at the site in leasing commercial space.
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