Did Amazon Just Pay $1.15B For The Lord & Taylor Building?
WeWork is reportedly selling the former Lord & Taylor building, once slated for the coworking company’s new headquarters, to Amazon for $1.15B.
The deal works out to $2K per SF, The New York Post reports, and involves the e-commerce giant paying $750M in construction loans that WeWork took out for the revamp of the property. The rest of the purchase price comes via $350M in equity.
Former WeWork CEO Adam Neumann won’t make any money on it, and WeWork will be allowed to get out of its lease in exchange for waiving economic interest, per the newspaper.
“Jeff Bezos toured three properties in Manhattan at Hudson Yards, the Farley and the Lord & Taylor property, and he chose Fifth Avenue,” a source told the Post.
Amazon is reportedly going to use the building as its New York City headquarters and move in 4,000 employees. Negotiations for Amazon’s purchase, which had been rumored, had intensified over the last two months.
WeWork Property Investors, a joint venture between WeWork and Rhône Group, paid $850M to Hudson Bay Co. last year for the building at 424 Fifth Ave. The arrangement drew scrutiny as possible self-dealing, and it was reportedly rolled into WeWork's larger ARK investment fund.
JPMorgan Chase, Starwood Property Trust and another lender combined to provide a reported $600M loan for the purchase. After WeWork’s IPO went up in flames, the building became a massive problem for the company, as a reported deal with Amazon to lease a large chunk of the space went cold.