Blackstone Provides $724M Refi for Cove Property Group’s Hudson Commons
By Cathy Cunningham November 25, 2019 1:05 pmreprints
Cove Property Group has closed a $724.2 million refinance for Hudson Commons, its trophy office redevelopment at 441 Ninth Avenue in Hudson Yards, Commercial Observer can first report.
Blackstone Mortgage Trust provided the debt in a transaction arranged by Eastdil Secured’s Grant Frankel, Phil McKnight and Ethan Pond.
“We are thrilled to provide senior mortgage financing on Hudson Commons, an outstanding property in Manhattan’s best performing submarket,” Steve Plavin, President and CEO of Blackstone Mortgage Trust, said in prepared remarks. “This transaction exemplifies BXMT’s differentiated ability to finance large scale, high quality real estate with strong sponsorship in core locations.”
Cove Property Group, along with Boston-based hedge fund The Baupost Group, purchased the property from EmblemHealth in 2016, paying $330 million. In 2017, the Cove-Baupost partnership secured a $479 million construction loan from Apollo Commercial Real Estate Finance and began a creative adaptive reuse redevelopment of the property.
The former structure comprised 423,000 square feet across eight stories, but Cove added an additional 17-story structure atop the building, expanding the total square footage to approximately 700,000 square feet. The Kohn Pedersen Fox-designed trophy asset features executive parking, premium bike storage, an 8,000-square-foot conferencing center and tenant lounge.
“From day one, we held true to our business plan of preserving a remarkable industrial building, while adding to it an integrated, efficient tower and thereby creating a best-in-class work environment that fosters collaboration, innovation and growth, all at the gateway to Manhattan’s newest center of business,”Cove Founder and Managing Partner Kevin Hoo said in a statement. “Cove and Baupost are extremely proud of the finished product, which we recently launched to market, and we look to welcome new tenants into the remaining tower floors. We are pleased that Blackstone appreciates the execution of our vision, and we are excited to be partners with them in this next chapter of Hudson Commons.
Anchored by Peloton, Hudson Commons is 65 percent leased today. Pelton occupies 336,000 square feet of the building as its corporate headquarters, Lyft leases 100,000 square feet and hedge fund Brevet Capital Management took 16,000 square feet in August on a 10-year lease. Within the newly-constructed tower floors, 213,000 square feet of office space remains, including the penthouse—which features a private rooftop garden and panoramic views across the city.
“With its sweeping views, hospitality-quality amenities and modern design features, Hudson Commons brings a unique appeal for creative and boutique office users,” Katie Keenan, Executive Vice President of Investments at Blackstone Mortgage Trust, said. “Cove and Baupost achieved top-notch execution on a complicated project, and we are excited to be financing this wonderful property.”