The We Company (formerly known as WeWork), along with its partner Rhône Capital, have purchased the former Lord & Taylor flagship location at 424 Fifth Avenue for $850 million. This comes more than a year after announcing the acquisition.
WeWork Property Investors—the name of the joint partnership between WeWork, recently rebranded as The We Company, and Rhône—bought the 676,000-square-foot property from Lord & Taylor parent company Hudson’s Bay Company, which has been struggling and closed 10 Lord & Taylor locations earlier this year to focus on e-commerce, as Commercial Observer previously reported.
“The completion of this transaction, which will see us bring new life to the iconic Lord & Taylor building, reflects the evolution of the We Company, the diversification of our real estate strategy and the company’s ongoing transition from an occupier to an operator of space,” a spokesman for WeWork said in a statement.
The Canada-based Hudson’s Bay will still own a $125 million minority stake in the building between West 38th and West 39th Streets and touted in a release that the sale allows it to remove the nearly $400 million mortgage on the building from its books.
“We’ve fortified our balance sheet in short order,” Richard Baker, HBC’s governor and executive chairman, said in a statement. “Since the end of fiscal 2017, we’ve paid down approximately CAD $1 billion [about $75 million] in debt, providing us flexibility to support our business goals and advance our strategy.”
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