Dealmaker: WeWork To Acquire Lord & Taylor Manhattan Flagship for $850M
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Office-sharing startup WeWork, New York, agreed to acquire Lord & Taylor's flagship retail store on Manhattan's Fifth Avenue for $850 million.
Lord & Taylor--which has occupied the building since its 1914 opening--will operate the store through the 2018 holiday season, then WeWork will convert it into its new headquarters building. WeWork will also lease some shared office space to its clients. A redesigned Lord & Taylor retail store will continue to occupy 150,000 square feet.
The Wall Street Journal reported the property with a main facade on Fifth Avenue and other facades on West 38th and West 39th Streets received a $655 million valuation when it was refinanced in 2016.
In addition to this transaction, Lord & Taylor parent company Hudson's Bay Co., Toronto, said this week it has started a "multi-faceted" strategic alliance with WeWork. A joint venture between WeWork and Rhône Capital, New York, will invest $500 million in Hudson's Bay.
The alliance could lead to future real estate sales, Hudson's Bay Co. said. "The formation of a strategic alliance is expected to produce future real estate transactions and monetizations."
Hudson's Bay said the Lord & Taylor property sale demonstrates the value of its global real estate "and the company's commitment to maximize productivity."
New York's Landmarks Preservation Commission declared the property a landmark in 2007. The commission called the 10-story-plus-penthouse building a "turning point" in retail design. "The dignified, Italian Renaissance Revival store...was the first ‘frankly commercial' building along the fashionable Fifth Avenue shopping district then developing above 34th Street. On Fifth Avenue the formal two-story arched entrance is flanked by two tiers of display windows; those on the lower tier annually showcase the store's animated holiday displays."
Last week the Wall Street Journal said Wal-Mart is considering adding Lord & Taylor to its website in an effort to build an online shopping destination to compete with Amazon.