WeWork, the NY-based office sharing community, is buying the flagship building of Lord & Taylor at 424 Fifth Avenue for $850 million. The building will be renovated in 2019 and become the corporate headquarters of WeWork along with office space. The lower floors will remain a redesigned Lord & Taylor store which will take up just 150,000 square feet of the 670,000+ square-foot building.
HBC (Hudson’s Bay Company) — based in Toronto — owns Lord & Taylor as well as Saks Fifth Avenue and Hudson’s Bay stores in Canada. Like other department store chains, HBC has seen sales decline with the rise of online shopping. The purchase of the Lord & Taylor flagship is part of a bigger deal struck between WeWork and HBC. WeWork plans to lease retail space within select HBC department stores, beginning with the upper floors of the Hudson’s Bay locations on Queen Street in Toronto and Granville Street in Vancouver and Galeria Kaufhof in Frankfurt.
For WeWork, the relationship provides an opportunity to partner with HBC across its 61 million sq ft global real estate portfolio and an opportunity to attract new members through desirable locations associated with high-end retail.
HBC corporate offices in New York, Toronto, Cologne, Dublin and Bengaluru will be early adopters of “Powered by We” – an operating platform that allows WeWork to combine physical spaces with digital systems to more efficiently and effectively design, build and operate office space.
The Lord & Taylor flagship store is one of the oldest department stores in NY. Lord & Taylor is expected to continue operations in the entire building through the 2018 holiday season. Thereafter the building is intended to be converted into WeWork’s New York headquarters, WeWork office space, and a redesigned Lord & Taylor store of approximately 150,000 sq. ft.