Commercial-real-estate firm WeWork's $1-billion purchase of the Hudson's Bay Co.'s flagship Lord and Taylor store making waves in NY will send ripples through downtown Vancouver's commercial real estate market.
HBC announced the deal as part of a series of strategic transactions with WeWork Companies, Rhone Capital and an affiliate of WeWork Property Advisors, a joint venture between WeWork and Rhone.
New York-based WeWork leases office space and rents it out to individuals and small companies, namely startups.More news: Arsene Wenger reveals possible squad changes for Arsenal's trip to Goodison Park
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The transaction comes as Hudson's Bay or HBC is under intense pressure from activist shareholder Land & Buildings Investment Management LLC to evaluate all strategic options to maximize value for shareholders, including monetization or repurposing of the company's real estate. Whether the agreement with WeWork will satisfy the investor, remains to be seen.
Lord Taylor, whose retail dry goods store at Broadway and Twentieth Street has been familiar to New Yorkers for more than a generation, have decided that the time has come to establish a new headquarters in the uptown Fifth Avenue shopping centre, and they have taken a large plot for a new store on the west side of Fifth Avenue, between Thirty-eighth and Thirty-ninth Streets.More news: Slain soldier's widow explains why Trump's call made her angry and sad
"This is a transformative partnership that rethinks how retailers create exciting environments and leverage less productive space, while substantially improving the value proposition", said Richard Baker, HBC's governor, executive chairman and interim CEO.
That is 30 per cent above the most recent appraised value, according to a press release from HBC.
Lord & Taylor will remain in the entire building until after the 2018 holiday season under the terms of the deal, Nasdaq reported. The retail space will be reduced from 650,000 sq. ft.to 150,000 sq. ft. and will be confined to the bottom floors.More news: Women Have Accused Hollywood Director James Toback Of Sexual Assault
WeWork launched in 2010, in Manhattan. "Our partnership with the WeWork team creates new opportunities for HBC to redefine the traditional department store by extending those communities and drive additional traffic to our stores, particularly as we add co-working and community space to existing, vibrant retail locations".
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