It was reported a few weeks ago that the New York-based, handbag/shoe maker, Coach, is negotiating with Related for 600,000 sf of space in a new tower at the Hudson Yards.
Related woos Coach
Related eyes Coach bags
November 30, 2010
Stephen M. Ross's Related Cos. has a leathery catch on the line for its planned Hudson Yards development project -- New York-based luxury goods maker Coach, Inc.
Sources told us booming Coach is prowling for up to 600,000 square feet of office space on the West Side for a new corporate home. "Coach has been exchanging paper" with Related regarding Hudson Yards as well as with other landlords in the area, the sources said.
Publicly-traded Coach was founded here in 1941. Its leather bags, accessories and other products are sold at 400 stores in the US and Canada, including eight in Manhattan. But few shoppers know that Coach is also a big office-space user.
The company owns its 265,000-square-foot headquarters building at 516 W. 34th St., which it once used for manufacturing and where it still maintains a small factory to produce samples.
It also has a few hundred thousand square feet at 450 W. 33rd St. and at a smaller building on 34th Street. "Now, they've outgrown their premises," a source explained.
There's no letter of intent for Hudson Yards, at least not yet. But a source described the Related talks as "still a work in progress but very serious." Financially strong Coach currently has around $1 billion in cash on its balance sheet to play with.
The 26-acre Hudson Yards site bounded by 10th and 12th avenues between West 30th-33rd Streets -- most of it above the West Side rail yard -- is to be developed by Related and OMERS, the Ontario Municipal Employees Retirement System. Last May, Related signed a deal with the MTA to lease the site for 99 years, with the partners putting in a $21.75 million deposit.
The project is eventually to include 21 million square feet of development. The master plan calls for three corporate headquarters sites, 5,000 apartments in nine buildings, "destination" retail, a luxury hotel, a new public school, cultural facilities and 12 acres of public open space.
It was understood last night that Coach and Related weren't focused only on one of the office sites, but were exploring "options" at all three.
The MTA/Related deal is contingent on several economic-climate yardsticks. As is typical of such public-private arrangements, it's full of escape clauses and trap doors allowing either side a way out. Moreover, Related must first build a platform over the tracks.
But Related has said previously that with a tenant, work could start as early as 2012. And, if history proves anything, nothing can get a huge project off the ground -- and make all the issues go away -- like a tenant commitment.
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