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Airbnb recently decided it would pilot a new hotel-type partnership at a Midtown Manhattan skyscraper. Now WeWork is also partnering with the building's landlord, RXR Realty, to open a space with a partnership it has never tried before in the U.S.
The building, 75 Rockefeller Plaza, is controlled by RXR Realty, which holds a 99-year ground lease and is headquartered on the 14th floor. WeWork will occupy 90K SF across four floors, but rather than sign a traditional lease, as it does with most of its hundreds of locations, WeWork and RXR have entered into a cost- and profit-sharing agreement.
WeWork will design and program the space, and it already has an enterprise member lined up to fill it, the companies said Thursday. Construction has already begun, and the company expects to move in this fall.
“As we continue to expand our physical footprint, we are increasingly entering into partnerships with landlords that allow them to share in the growth and upside we are seeing on a global level,” WeWork Chief Real Estate Development Officer Granit Gjonbalaj said in a statement. “We are delighted to have entered into our first such partnership in New York City with the team at RXR, one of the most innovative companies in real estate.”
The partnership model is new for WeWork in New York, but the company already has deals like it in place in Europe, Asia and South America, it said. The partnership model is frequently used by other coworking players like Industrious, which has recently eschewed traditional leases for partnership deals with landlords.
While WeWork will occupy four floors at the 625K SF, 33-story 75 Rock, RXR reached a deal with Airbnb to convert 10 other floors at the building to units that will toe the line between apartments and hotel rooms.
RXR, led by founder and CEO Scott Rechler, owns several legacy properties in Manhattan, including Chelsea's Starrett-Lehigh Building and the Helmsley Building on Park Avenue.
“We pride ourselves on being a forward-thinking company that has built a reputation of taking iconic buildings and reimagining them for use in the 21st century,” Rechler said in a statement.
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