Wells Fargo pays Related, Oxford $321.7M for retail condo in Hudson Yards, part of $550M deal

Wells Fargo through the entity Wells Fargo Properties, Inc. acquired an interest from Related Companies and Oxford Properties Group through the entity ERY Retail Podium LLC valued at $321.7 million for a portion or all of a retail condominium unit at 20 Hudson Yards in Hudson Yards, Manhattan. This transaction is part of a $550 million deal in which Wells Fargo would buy the retail condominium unit that was to be occupied by Neiman Marcus, which Bloomberg first reported. It was unclear why this transaction amount is lower than the reported amount.

The transaction was an entity-level sale, not a deed transfer, and also included an assignment of ground lease from Related Companies to Wells Fargo covering this unit, which is tax lot 1309.
The deal closed on November 22, 2023 and was recorded on December 7, 2023.
Bloomberg reported that the bank was paying about $550 million for the space, said to be about 400,000 square feet. The entire condo unit that is the subject of the purchase is 311,298 square feet according to city records. The square foot figures for commercial real estate are often inflated because of loss factor, which may explain the difference between the 400,000 square foot published figure and the city record for 311,298 square feet.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Wells Fargo had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Related Companies purchased six properties in two transactions for a total of $61 million and sold 15 properties in 13 transactions for a total of $799.2 million over the same time period.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 28, 2018. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of five of the nine commercial properties representing 1,835,464 square feet of the 1,842,264 square feet. The two identified owners are Related Companies and Mta.
On the tax block, there were four new building construction projects totaling 10,126,343 square feet. The largest is a 392-unit, 6,180,866 square-foot residential (R-2) building submitted by Related Companies and filed by Gregory Gushee with plans filed December 16, 2013 and permitted January 21, 2016. The second largest is a 3,075,210 square-foot business (B) building submitted by Related Companies and filed by Emad Lotfalla with plans filed July 9, 2014 and permitted April 23, 2015.

The majority, or 100 percent of the 1.8 million square feet of built space are office buildings, with specialty buildings next occupying 0 percent of the space.

The seller

The PincusCo database currently indicates that Related Companies owned at least 178 commercial properties with 9,555 residential units in New York City with 21,530,381 square feet and a city-determined market value of $6 billion. (Market value is typically about 50% of actual value.) The portfolio has $5.1 billion in debt, with top three lenders as Wells Fargo, Carlyle Group, and Deutsche Bank respectively. Within the portfolio, the bulk, or 45 percent of the 21,530,381 square feet of built space are elevator properties, with office properties next occupying 30 percent of the space. The bulk, or 60 percent of the built space, is in Manhattan, with Bronx next at 24 percent of the space.

Correction: A prior version of this post reported the square feet for the condo unit as 800,000 square feet, when in fact it is 311,298 square feet.

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