CommonWealth partners buy Hudson Commons
An investor backed by California’s massive state pension fund has signed a deal to buy an office building in the Hudson Yards neighborhood for more than $ 1 billion.
The deal comes as Manhattan continues to struggle to get workers back into the office and companies plan to downsize their space. It also shows a growing gap between high quality homes and those that will bear the brunt of the shift to work from home.
Los Angeles CommonWealth Partners – an advisor to the California Public Employees’ Retirement System Fund – have signed a ten-digit deal to buy the Hudson Commons office building on Ninth Avenue, sources said The only true.
It’s the biggest deal since Google announced in September that it would buy its Hudson Square office building for $ 2.1 billion.
But owner-occupiers like the giant tech company are driven by different factors than investors like CommonWealth Partners. While the purchase of Google signals a desire from big tech firms to return to the office, the CommonWealth deal is a sign that despite headwinds, investors are still willing to write large checks on a certain class of Manhattan office buildings.
CommonWealth Partners representatives were not immediately available for comment.
Despite big deals for offices in Manhattan, the market is still facing major challenges. According to a poll published today by the Partnership for New York City, only 8 percent of Manhattan office workers were back in the office five days a week at the end of October.
In addition, 34 percent of companies plan to reduce their office supplies over the next five years.
Cove Property Group and Baupost Group, developers of the 700,000-square-foot Hudson Commons, bought the property at 441 Ninth Avenue in 2016 for $ 330 million, driving demand for Manhattan’s West Side following the opening of Hudson Yards .
They refurbished the former warehouse, which had been converted into offices for EmblemHealth, adding 17 floors above it and then renting it to tenants such as Peloton and Lyft.
The developers put the property up for sale with a team from CBRE earlier this year.
CommonWealth Partners, led by CEO Brett Munger, is a large landlord on the West Coast. It owns the 1.7 million square foot office tower at 787 Seventh Avenue near the Rockefeller Center.
The company has served as an investment advisor to CalPERS since 1998. In 2019, CalPERS allocated $ 3.1 billion to new core property purchases, of which $ 750 million was remitted to CommonWealth.