WeWork opened its office in Harlem afew years back, now Crains NY reports that Lord & Taylor’s century-old flagship store on Fifth Avenue is set to be sold for $850 million to the real estate investment arm of WeWork.
The acquisition marks the co-working company’s evolution as a major landlord and adds another location to the more than three dozen sites it owns, operates or plans to open in Manhattan. The department store will maintain a downsized retail presence, according to the Wall Street Journal, giving way to office space and a headquarters for WeWork. Crain’s reported earlier this month that WeWork was clearing tenants from a Chelsea location in order to expand headquarters space there.
The deal was conducted through a joint venture between WeWork and private-equity firm Rhône Group. Rhône is also taking a $500 million piece of Hudson’s Bay Co., the Toronto-based parent company of Lord & Taylor, which has been looking to ease its debt burden.
Lord & Taylor’s century-old flagship store on Fifth Avenue is set to be sold for $850 million to the real estate investment arm of WeWork.
The acquisition marks the co-working company’s evolution as a major landlord and adds another location to the more than three dozen sites it owns, operates or plans to open in Manhattan. The department store will maintain a downsized retail presence, according to the Wall Street Journal, giving way to office space and a headquarters for WeWork. Crain’s reported earlier this month that WeWork was clearing tenants from a Chelsea location in order to expand headquarters space there.
The deal was conducted through a joint venture between WeWork and private-equity firm Rhône Group. Rhône is also taking a $500 million piece of Hudson’s Bay Co., the Toronto-based parent company of Lord & Taylor, which has been looking to ease its debt burden.
Lord & Taylor’s flagship store opened on Fifth Avenue in 1914 but has a lower sales impact than Hudson’s Bay’s Saks Fifth Avenue store 10 blocks north, the firm said. The retail market—especially for large department stores like Macy’s and Lord & Taylor—is struggling in the face of e-commerce competitors, while office landlords are seeing a steady demand for space. WeWork was recently valued at $20 billion and has been sitting on a $4.4 billion pot of cash from a SoftBank investment earlier this year.
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