L’Oréal USA Inks 402,000 SF Lease at Hudson Yards
By Al Barbarino April 11, 2013 4:09 pmreprints
L’Oréal USA has inked a 402,000-square-foot of space at the South Tower of Hudson Yards, the developers of the 15-million-square-foot project on the far west side of Manhattan announced yesterday.
Along with that announcement came news that SAP also leased 115,000 square feet on the top four floors of the building, bringing the LEED Gold South Tower to more than 80 percent occupancy. Sources said the deals are for 15 years.
The companies join Coach, which agreed to pay a reported $750 million for its 740,000-square-foot global corporate headquarters in the tower in late 2011, after what Related’s president on the project, Jay Cross, called a three-year negotiation process.
“The confluence of three significant tenants committing to the building almost simultaneously is a testimonial to the belief in this project and its future,” said CBRE’s Stephen Siegel, who represented L’Oréal with Mike Geoghegan, Bill Hedman and Lauren Crowley Corrinet.
Mr. Siegel said the process to find L’Oréal a new space took about two-and-a-half years, stretching from Midtown to Midtown South to Downtown, with negotiations at Hudson Yards beginning roughly nine months ago.
The company plans to move from its current New York City headquarters at 575 Fifth Avenue by mid-2015, consolidating into 10 floors that are over 30,000 square feet each at the South Tower.
“They will be able to consolidate to half as many floors, which makes the synergy needed between different divisions much easier and more efficient,” Mr. Siegel said.
Related is developing the project with partner Oxford Properties Group, with the first phase, the Eastern Yards, comprising roughly six million square feet of mixed-use development at an estimated cost of $6 billion.
“We are thrilled that global beauty and software powerhouses L’Oréal and SAP, along with Coach, Inc., will be locating at Hudson Yards,” said Stephen Ross, Related Companies’ chairman, in a prepared statement. “With construction already underway, we look forward to continuing to implement our ambitious vision for the defining development of the 21st Century and the new heart of New York.”
The South Tower, designed by Pedersen Fox Associates, is a 1.7-million-square-foot, nearly 900-foot-tall office building with ground floor retail space and 15,000 square feet of terrace space on three levels, slated for occupancy in 2015.
Oxford CEO Blake Hutcheson called the leases “a testament to the momentum behind the development and this great period of growth in New York City,” in a prepared statement.
L’Oréal USA is relocating its corporate headquarters, while software company SAP creates its New York City flagship.
The 26-acre site will include more than 6 million square feet of commercial space, 750,000 square feet of retail space, about 5,000 residences, a new school, and a luxury hotel. It is located near the West Side Highway, the Lincoln Tunnel, and the extension of the No. 7 subway line, scheduled to open in 2014, will connect to the heart of the neighborhood.
The developers also announced that they have closed on nearly $1.4 billion in equity investments and debt financing for Hudson Yards from a consortium of investors and lenders — including Starwood Property Trust, as first reported in the Mortgage Observer Weekly – who will fund the South Tower.
Alexander Chudnoff and Scott Vinett of Jones Lang LaSalle represented SAP along with Steve Andrews and Christopher Joyner of Fischer & Company.
Bob Alexander, Howard Fiddle, Rob Stillman, Len DiMicelli, Zakery Snider and Ryan Alexander of CBRE represented Related and Oxford.
The additional brokers either declined comment or did not return calls in time for publication.