Related Cos. has received enough loan commitments to start work next month on a 1.7 million- square-foot skyscraper on Manhattan’s Hudson Yards development site, according to a person with knowledge of its plans.
Related has a tentative commitment with Bank of America Corp. (BAC:US) and other lenders for about $400 million of financing on the $1.2 billion tower, said the person, who asked not to be identified because talks are private. The financing package should be completed by the end of the year, the person said.
The New York-based developer, led by real estate investor Stephen Ross, has rights to build more than 12 million square feet (1.1 million square meters) of mixed development over train yards near the Hudson River. Related last year agreed to make Coach Inc. (COH:US), the luxury-handbag company, the anchor occupant in the initial 46-story tower, taking about 600,000 square feet. Coach will own its space under the plan.
The Hudson Yards project, which Mayor Michael Bloomberg last year compared to London’s Canary Wharf for its potential to move the Midtown business district west toward the Hudson River, includes about 6 million square feet of new offices, 5,000 residences, a more than 750,000-square-foot shopping area, luxury hotel, open space, a cultural center and a school, according to Related’s website. Most of it requires the construction of platforms over the train yards of the Metropolitan Transportation Authority, which owns the site.
The Coach tower would rise on the southeast corner of the site, which is on solid ground, and doesn’t require a deck.
The remaining $800 million cost for construction of the skyscraper would come from equity from the developers and from Coach, the person said. Related’s partner on the project is Toronto-based Oxford Properties, the real estate investment unit of Ontario Municipal Employees Retirement System.
Joanna Rose, a Related spokeswoman, declined to comment, as did Jefferson George, a Bank of America spokesman.
Details of the financing were reported late yesterday by the Wall Street Journal.
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