Coach Inc., a leading New York design house of modern luxury accessories and lifestyle brands, sold and leased back its global headquarters portion of 10 Hudson Yards in New York City.

The company received a purchase price of $707 million (net of $77 million due to the developer of Hudson Yards) before transaction costs of $26 million, resulting in a gain of about $30 million which will be amortized over 20 years.

In April 2013, Coach entered into a joint venture agreement with the Related Companies, LP to develop the office tower. The formation of the joint venture served as a financing vehicle for the project.

10 Hudson is the first tower completed in Related Cos’. and Oxford Properties Group’s mixed-use Hudson Yards development on Manhattan’s west side.

Allianz Real Estate, based in München, Germany, along with partners acquired Coach’s 44% stake. A limited partnership that includes Allianz, Related, Oxford and institutional investors advised by J.P. Morgan Asset Management, now owns the property.

The price of $707 million received for a 44% stake would value the full building at around $1.6 billion.

Securitization of the financing now backing 10 Hudson Yards is now moving forward being led by affiliates of Goldman Sachs.

Coach Lease

Coach entered into a 20-year lease for new headquarters space. The lease consists of the entire 9th through 23rd floors comprising 694,000 square feet, with rights to expand to additional floors. The company is currently in the process of occupying the new space.

“We are very pleased to monetize our investment in Hudson Yards, where we were the first company to commit to the project and will be the largest tenant in the new building,” said Victor Luis, CEO of Coach. “We are bringing both our brands – Coach and Stuart Weitzman – together under one roof, in a modern work space, very much reflective of the Coach values and sensibility.”

Allianz

Of its stake in Manhattan’s 10 Hudson Yards Tower Francois Trausch, CEO of Allianz Real Estate worldwide, said: “Our significant investment of approximately $420 million exemplifies Allianz Real Estate’s strategy to increase its exposure to the 24/7 global cities.”

10 Hudson Yards is 94% leased with a weighted average lease term of nearly 17 years. The property includes an impressive tenant roster including Coach Inc., L’Oreal USA, SAP and Boston Consulting Group. In total, 74% of the leases are to investment-grade tenants.

For more information see CoStar Sale Comp ID: 3665176