Developer Tishman Speyer secures funds for $3.7 billion New York office tower

NEW YORK (Reuters) - Developer Tishman Speyer said on Tuesday it had secured the necessary financing to build a 65-story, $3.7 billion office tower called “The Spiral” in the Hudson Yards, a district that is dramatically changing New York City’s skyline.

The project in Manhattan, featuring cascading landscaped terraces and hanging gardens designed by the BIG-Bjarke Ingels Group, was also made possible by Pfizer Inc's PFE.N plan to move its global headquarters to the building, Tishman said.

Financing for the project includes $1.9 billion in equity from Tishman and more than a dozen institutional and individual investors and pension funds, the company said in a statement.

A $1.8 billion construction loan from Blackstone Mortgage Trust Inc BXMT.N also was secured, the largest it has backed for a single asset, the lender said.

Tishman acquired the project’s land in 2014 when development of the massive Hudson Yards district, built over railway yards for the nearby Pennsylvania Station, was in the early stages.

Rob Speyer, the company’s president and chief executive, said it was evident that Manhattan, where the average office building is 80 years old, is starved for new office space.

“I can’t think of another city that has an economy as vibrant as ours with the real estate inventory as dated,” Speyer said. “There are not many moments when you have the opportunity to make a mark on your city’s skyline.”

Construction at 66 Hudson Boulevard will begin in June, and when finished in 2022, the tower will rise 1,031 feet (314.2 meters). Terraces will ascend in a spiraling motion, inspiring the name of the 2.8 million square foot (260,130 square meter) building.

The mixed-use Hudson Yards has pushed Manhattan’s core Midtown business area westward toward the Hudson River, drawing a number of marquee firms to the burgeoning district.

Pfizer, the building’s anchor tenant, will occupy 15 full floors as part of an 800,000 square foot lease that includes a lobby that rises as high as 28 feet, Tishman said.

Related Companies and Oxford Properties Group, which have spearheaded Hudson Yard’s development, also announced on Tuesday the start of construction of what the companies described as the highest outdoor observation deck in the Western Hemisphere at nearby 30 Hudson Yards.

Fried Frank was legal advisor for Blackstone Mortgage Trust, and Sullivan & Cromwell for Tishman Speyer.

A Cushman & Wakefield team led by Josh Kuriloff represented Pfizer in the lease negotiation.

Editing by Bernadette Baum and Daniel Bases