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CMA
August 09, 2019  

Blackstone Backing Redeveloped NY Offices

Blackstone has agreed to lend about $725 million on a Midtown Manhattan office building that was just redeveloped and expanded.

The 700,000-square-foot property, at 441 Ninth Avenue, is owned by a partnership between Cove Property and Baupost Group.

Blackstone’s floating-rate loan, arranged by Eastdil Secured, has a five-year term and includes a future-funding component linked to leasing and performance hurdles. It’s unclear if Blackstone will fund the entire balance itself or bring in other lenders. The shop sometimes retains the junior portions of loans and places the senior components with other shops.

The property was built in 1953 as a warehouse and converted into offices in the 1980s. It stretches along the west side of Ninth Avenue from West 34th to West 35th Street, a block west of Penn Station and within the Hudson Yards redevelopment district.

New York-based Cove and Baupost, a Boston investment manager, purchased it in December 2016 for $330 million. At the time, the seller and sole occupant, health insurance company EmblemHealth, was preparing to vacate.

The Cove partnership conducted a major renovation that added a recessed 18-story tower on top of the original building, which encompassed 423,000 sf over eight floors. The modernized property, now known as Hudson Commons, has new or overhauled mechanical systems and elevators, floor-to-ceiling windows, terraces on most floors and street-level retail space.

Two-thirds of the space has been pre-leased. Exercise-equipment manufacturer Peloton will occupy 312,000 sf as its headquarters, while Lyft signed up for 100,000 sf. The property is expected to open in several weeks.