By Gail Kalinoski
Cycling equipment company and technology company Peloton will be the anchor tenant at the redeveloped Hudson Commons building on Manhattan’s Far West Side. The firm will take 312,000 square feet of the property’s 700,000 square feet as its corporate headquarters. The global company will be located on floors four through 10 of the 25-story building, plus a 13,000-square-foot space in the basement.
Peloton is moving to the building owned by Cove Property Group at 441 Ninth Ave. in the Hudson Yards submarket in 2020 from 125 W. 25th St. in Chelsea, where it has about 50,000 square feet of space. The new location, six times larger than its current space, will be close to the recently announced 35,000-square-foot Peloton Studios, the company’s flagship broadcast, production operations and multi-studio space set to open in early 2020 at 5 Manhattan West.
“New York is where Peloton started, and it will continue to be our home as we scale our business globally,” John Foley, Peloton co-founder & CEO, said in a prepared statement. “For a long time, New York was considered to be an afterthought for tech startups, but now it’s the second highest startup ecosystem in the world. By partnering with Cove Property Group, we’re able to truly commit to contributing to the city’s economy and deepening our footprint here.”
Peloton’s decision to expand in New York City comes one week after Amazon announced it was placing one of its two HQ2 locations in Long Island City in Queens, which will eventually add as many as 25,000 technology jobs to the region.
Newmark Knight Frank’s Executive Managing Director Benjamin Birnbaum and Senior Managing Director Ben Shapiro represented Peloton in the Hudson Commons deal. The landlord, Cove Property Group was represented by the CBRE team of Stephen Siegel, Evan Haskell, Paul Haskin, James Ackerson and Benjamin Joseph.
Cove transforms the building
Cove Property Group teamed up with Baupost Group in December 2016 to buy 441 Ninth Ave., then an eight-story office building owned by EmblemHealth, which had converted it from warehouse to office space in 1983. At that time, the buyers received a $220 million acquisition loan from Deutsche Bank. The property is located between 34th and 25th streets along the entire block on Ninth Avenue, across from Brookfield Property Partners’ One Manhattan West 67-story office tower and one block east of Hudson Yards, the $25 billion mega mixed-use project being developed by Related Cos. and Oxford Properties Group.
Cove Property Group and its joint venture partner received $479 million in construction financing in November 2017 to transform the older, smaller building into a Class A trophy property aimed at TAMI (technology, advertising, media and information) tenants such as Peloton, as well as fashion, financial and legal firms. HFF arranged the financing through investment funds managed by affiliates of Apollo Global Management, including Apollo Commercial Real Estate Finance Inc., which provided $250 million of first mortgage and mezzanine financing.
“Hudson Commons was conceived with creativity and entrepreneurialism in mind, offering unique, well-thought-out space to foster the best working environment for the talent of this generation,” Kevin Hoo, Cove’s co-founder & managing partner, said in a prepared statement. “Not only are John Foley and his exceptional team global standard-bearers in their field, [but] Peloton’s ethos is [also] a fantastic match for that of Hudson Commons, and we are very excited for the world-class space they will soon call home.”
New York City isn’t the only place where Peloton is growing its office space. In May, the firm signed a 27,500-square-foot lease at Legacy Central in Plano, Texas, for a regional campus, the company’s first support hub outside New York. Peloton planned to hire as many as 400 people to staff the Plano office at 6600 Chase Oaks Blvd., a 200,000-square-foot building that is part of Regent Properties’ technology-oriented and mixed-use campus.
Images courtesy of Newmark Knight Frank