^^Just looked into it to see what all the fuss was about.
http://www.bloomberg.com/news/2013-0...rds-tower.html
So Coach is paying $750M for 740,000 SF, or roughly $1,000/sf. Apparently it's "below cost" and being treated as financing to get the rest of the tower done since it is mostly a cash deal. Midtown class A towers often trade for $1500+/sf, and this being Midtown West you wouldn't necessarily see the same pricing, even with new construction. That being said, the remaining 1 million SF to be leased to L'Oreal, SAP (top 5 floors), and others are probably at rates that approach up to twice what Coach's average base is. Even here in SF in my own office building, the lower floors may average ~$50/sf while the mid-level floors average $65-75 and the high floors average $80-90+, and this is a 48 floor vintage 80s building that can be seen as the equivalent of a "GM Building" in Manhattan (which had an interest trade for $1900/sf this year and ironically my own company had a large stake not too long ago in the same building). I can only imagine the difference in a Midtown new construction office tower such as this with lower floors and higher floors showing an even greater delta in "lease" rates (Coach likely paid a $ amt for its space based on what it would normally lease it for and what market pricing would be, with discounts of course for anchoring and this that and the other...pricing is rarely based on if ever based on "cost" of construction, which is why just like in resi buildings the lower floors may actually go for "below cost" while the higher floors go for "way above cost").
The senior construction loan is syndicated between multiple banks and the equity comes from multiple sources, $100M of which comes from JP Morgan. I bet this is one of the most complicated capital stacks going in the country right now.
Needless to say, what's obvious to me is that neither the WTC towers nor the towers going up in Midtown West and elsewhere are or should rely on the Financials (like Citi). With that whole industry as frugal as it ever has been (big 10 banks at least - I work for a mid-size equity shop myself and this section of the financial sector is expanding, equity and VC in particular as the rise of tech and other industries is more reliant on alternative financing sources rather than banks, but we won't ever anchor a big new office tower, merely take up a floor at best), I would think that all big new towers are reaching out to tenants they normally wouldn't. The financial sector offered the credit backing one needs for such an anchor though. A big new tech firm may not have the history or credit, nor is necessarily looking for shiny NEW digs either in lower Manhattan OR Midtown (thinking Google in 111 Eighth as an example).
Hopefully as with deals already signed at the WTC site and Hudson Yards, more non-Financial firms step up to the plate. I'd love to see this tower go up before the Coach Tower or Hudson Yards North and will be sad if it never does rise
To me it's a much more elegant building and personally, I'd rather be in Lower Manhattan than Midtown West, which just doesn't seem as alive or snazzy.
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