Lyft, a popular ridehailing app rivaled only by Uber, is the newest technology tenant to sign on for new headquarters space at Hudson Commons, one of the major creative office repositionings that is redefining the Penn Plaza neighborhood in Manhattan’s Midtown West.

Lyft’s new headquarters is expected to span 100,638 square feet, and brings the Hudson Commons property at 441 Ninth Ave. to 63 percent occupancy ahead of its opening this summer. The deal follows a November lease agreement with fitness technology brand Peloton for a 312,000-square-foot headquarters that effectively anchors the 700,000-square-foot property.

As more than 10 million square feet of brand new, high-end office space rises within the Hudson Yards district on the western end of Manhattan, a number of Manhattan office landlords have jumped into redevelopment work within the adjacent Penn Plaza neighborhood, often citing Penn Plaza as one of the next submarkets to benefit from a new and growing workforce seeking quality office space with convenient transportation links.

“The Far West Side is at the forefront of the mixed-use community style developments that have changed the office landscape of Manhattan,” said Edward Son, a market analyst covering the New York City market for CoStar Market Analytics. “There is approximately 10.6 million square feet of office space currently under construction and another 3.8 million square feet proposed and waiting to secure an anchor tenant. The total of 14.4 million square feet will be a massive boost in the already existing inventory of 5.1 million square feet.”

When asked about the repositioning of older buildings in Midtown West to accommodate demand for new space, Cushman & Wakefield Managing Principal Lou D’Avanzo said that the market for those kinds of opportunities has strengthened.

“Landlords will look for those opportunities – from an investment side of this market, where can they purchase and reposition a building and they can price at one level of rent structure,” he noted. D’Avanzo was not involved in the Lyft transaction but is active in Manhattan office leasing activity and trends.

Cove Property Group, with its Hudson Commons project at 441 Ninth Ave., is one such landlord bringing new space to market to answer this demand. In December 2016, Cove teamed with hedge fund manager Baupost Group to acquire the 10-story building, a warehouse built in the early 1960s, from insurance company Emblem Health. Within a year, the developers had vacated the building and secured a $479 million construction loan to gut renovate and build an additional 18 stories atop the property, tapping architectural firm Kohn Penderson Fox to lead the redesign.

Cove is not the only Manhattan office landlord tackling large developments in the area. Vornado, for instance, is in the process of redeveloping more than 4 million square feet of its office holdings within Penn Plaza, including work on Moynihan Train Hall, Penn1 and Penn2. It will roll over $1 billion in proceeds from condominium sales at its luxury supertall tower, 220 Central Park South, to fund these endeavors.

“To a large extent, the concentration of new development by world-class developers in the Hudson Yards, as well as Penn Plaza neighborhood, will be a global advertisement for New York City for many years to come,” Cove Property Group Managing Principal Kevin Hoo said in an interview with CoStar News.

According to Son, when it comes to new office construction, the Penn Plaza / Garment District submarket leads all other submarkets in the United States, with approximately 12 million square of office space currently being built.

“The majority of the total is driven from the ultra-luxurious high-rise towers at the Far West Side, where developers such as Related, Brookfield, Tishman Speyer, and Moinian Group have office projects ranging from 1.6 million to 2.9 million square feet,” Son said. “As the new premium towers continue to receive strong demand with many of the city’s prominent occupants relocating to the area, investors have looked for value-add opportunities in the surrounding area.”

When considering the potential of 441 Ninth Ave., Hoo said that, “Proximity to Penn Station and the Lincoln Tunnel was a key driver in our thinking. That, coupled with diversity of offering that we could deliver in floor plate sizes and aesthetic was a unique combination that we felt compelling” from an investment perspective. Hoo added, “The ability to deliver such a multi-faceted office building through a complicated overbuild of an existing podium with 18 floors of new construction, all in less time than it would have taken us to tear down and build all-new, was a challenge too good to refuse!”

By retaining the majority of the building’s bottom structure and adding new construction above, Cove was able to support open floor plates that range in size from 16,000 to 50,000 square feet each.

“We saw an opportunity to create a unique property that attracted as wide a tenant audience as possible,” Hoo said, especially from those that value “efficient” floor space. Besides the interest from technology companies like Lyft and Peloton, the building is getting attention from more traditional financial services tenants, according to Hoo.

“We immediately identified unique aspects of the existing structure and its foundations which allowed us to essentially triple its height in an economical and efficient way,” Cove partner Thomas Farrell said in a statement. “Working with architect Kohn Pedersen Fox, our structural engineer WSP and [construction manager] Pavarini McGovern, we came up with an elegant solution to insert a core for the new tower within the existing column grid so as to harmonize the new and old in a seamless manner.”

Steve Siegel, chairman of Global Brokerage at CBRE, said in a statement that, “Hudson Commons is one of the most innovative development projects that we have been associated with. Cove and Baupost recognized the demand for both upgraded authentic and efficient space by the expanding technology tenant base along with the focus on high-end newly constructed space by the more traditional tenant.”

Siegel works on the CBRE team representing the landlord in leasing the tower.

Cove declined to comment on the project’s total anticipated development cost. The landlord is offering to new tenants a choice of industrial or modern interior finishes in retrofitting the interior space.

“We are finding that tenants today value aspirational working environments. Given the value placed on experiences within the environments they live and work in. We wanted to create an office building that would help tenants continue to attract and retain best in-class talent,” Hoo said.

“The layouts of the floors have been designed to be as efficient as possible, while maintaining the flexibility to be collaborative, office intensive or a mix of both,” he said. “The 14-foot ceiling heights, floor-to-ceiling glass in the tower and nearly column-free space allow us to curate this environment. We also valued the authenticity of the existing building and used a wood-form concrete core and long-span castellated beams throughout the new floors to retain the industrial feel.”

Tenant amenities include dedicated outdoor terraces on 14 of the 18 new floors, bike storage and showers, as well as a tenant lounge and conference center on the ground floor, which offers tenants the ability to hold town halls or ad hoc meetings.

Cove has also invested into “mobile app-based, tenant-facing technology,” to enable building entry via facial recognition, on-demand amenity booking and an interface to communicate service requests with management. The property is on track to achieve WiredScore platinum and LEED platinum certifications, and has had a Distributed Antenna System to maximize wireless connectivity.

About 235,000 square feet remains available for lease at Hudson Commons.

Hoo said that leasing progress at the building “tells volumes as to the attractiveness of redeveloped and new development on the far West Side” of Manhattan. “But this is only the start,” Hoo explained, “as the influx of new office tenancy and the vibrancy of the residential and retail tenancies that will accompany it will also develop its own identity in time and further improve the neighborhood. We feel strongly that the diversity of Hudson Commons’ design and its proximity to Penn Station will allow us to benefit from this trend over the long term.”

For the Record: A CBRE team of James Ackerson, Evan Haskell, Paul Haskin, Ben Joseph and Stephen Siegel work as exclusive office leasing agents for the property. Justin Haber and Steven Rotter of Jones Lang LaSalle acted on behalf of Lyft in lease negotiations.