ALIZF Allianz Ag Muenchen Namen (PK)

By Maria Armental 

Coach Inc. sold its headquarters in New York's Hudson Yards development for $707 million under a sale and leaseback agreement, the luxury retailer said Monday.

Separately, Allianz Real Estate, the property-management unit of the German insurer, said it had bought a 44% stake in the 10 Hudson Yards tower, the first building completed in the massive redevelopment project on Manhattan's West Side, a signature initiative of former Mayor Michael Bloomberg and the largest private real-estate redevelopment since the economic downturn.

Allianz's 44% stake includes Coach's share and a portion the stake held by Kuwait's sovereign-wealth fund, the Kuwait Investment Authority.

The building is now owned by a limited partnership that includes Allianz, with a cash investment of about $420 million, Related Cos., Oxford Properties Group Inc. and institutional investors advised by J.P. Morgan Asset Management. Deutsche Bank and Goldman Sachs provided $1.2 billion in debt financing, according to a news release Monday.

The first tenant to commit to the project in 2011, Coach paid $530 million for its 738,000-square-foot portion of the 10 Hudson Yards tower and an additional $220 million to build out the space.

Best known for its handbags, Coach had said it intended to sell its roughly 43% stake and lease back the office space. Monday, it said it had signed a 20-year lease.

Coach would be the largest tenant in the building, bringing under one roof its Coach and Stuart Weitzman brands.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

August 01, 2016 20:18 ET (00:18 GMT)

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