WeWork Nabs Lord & Taylor Flagship for $850M
- Oct 30, 2017
WeWork is making its presence known in Manhattan, snagging Hudson’s Bay Co.’s flagship Lord & Taylor building on Fifth Avenue for $850 million, to serve as its new global headquarters. Rhone Capital is teaming up with WeWork Cos. to purchase the asset and making a $500 million equity investment in HBC as part of the deal, helping to lower HBC’s debt levels. The retailer will lease the bottom floors of the 676,000-square-foot landmark, occupying less than a quarter of the asset’s space, with its move expected for late December 2018.
WeWork will also lease space in other HBC-owned Lord & Taylor stores in Toronto, Vancouver and Frankfort.
“We bought a bunch of old, tired department stores in many cases, and we want to reinvent them, make them more exciting, more interesting,” said Richard Baker, interim CEO of Hudson’s Bay, at the recent WWD Apparel & Retail CEO Summit in New York. “One of the ways of doing that is to bring other uses to our buildings…we’ll be rolling out WeWork hopefully in a lot more locations than the first four.”
The acquisition comes on the heels of WeWork receiving a major capital investment in August from SoftBank Group and SoftBank Vision Fund to the tune of $4.4 billion. The company has steadily been increasing its coworking offerings this year, with new additions including a 60,600-square-foot space at 650 California St. in San Francisco and an 85,000-square-foot spot at Trinity Centre in Lower Manhattan. WeWork’s current New York headquarters is in Chelsea, where it began pushing tenants out earlier this month after announcing it could no longer accommodate the nearly 500 tenants at 115 W. 18th. St, according to Crain’s New York. While many though WeWork would look to expand its Chelsea location, the Lord & Taylor building seems to be the new route to accommodate the co-working provider’s rapidly growing business.