Amazon Opens Billion-Dollar Fifth Avenue Office Amid Hardened In-Person Work Stance
Three years after buying the former Lord & Taylor department store building from WeWork for nearly $1B, Amazon officially opened its new Fifth Avenue office building Tuesday for a markedly changed workplace.
The e-commerce giant put its three-day-a-week office policy into effect in May, with the company now reportedly tracking employee locations and contacting those who are suspected of working remotely too frequently.
At the official opening of the 600K SF building at 424 Fifth Ave. Tuesday morning, attended by New York City Mayor Eric Adams, Amazon Vice President of Global Real Estate and Facilities John Schoettler told Bisnow the firm’s employee office presence has been increasing each month since May, though he declined to provide specifics.
The company has drawn a line in the sand favoring in-person work.
"We really believe that it is the best way for us to really be able to innovate and deliver on behalf of our customers," Schoettler said in an interview. "We're giving people time over the spring and summer to get there, to change, quite honestly. It took me time to get used to having to work remotely and work from home, and then I think it takes people a chance to sort of readjust and to be able to come back. But we know that people that are coming to the office, they're loving being here."
This particular office has had quite a journey from department store to modern-day workplace. The 11-story building opened as Lord & Taylor's flagship department store in 1914, a designation it held for more than a century before the retailer's demise.
An affiliate of WeWork, then in its heyday, bought the property from Lord & Taylor's parent company, Hudson’s Bay Co., for $850M in 2019 with a plan to build out a new corporate headquarters in the landmark, hiring renowned architect Bjarke Ingels to design the project. Months later, WeWork's initial public offering collapsed, its CEO was ousted and it launched into cost-cutting mode.
Amazon paid $978M for the building a year later and began renovations, which turned out to be a complicated process, The Wall Street Journal reported.
About 2,000 of Amazon’s employees are assigned to the building, Schoettler said, a fifth of the Seattle-based company's current employee headcount in Manhattan, Queens, Brooklyn and New Jersey, which stands at around 10,000. The company is always reassessing its leases and real estate footprint, though Schoettler said he wasn't sure of current plans to consolidate office space around the city.
The company leased 90K SF in the WeWork at RXR Realty’s 75 Rockefeller and nearly 210K SF in the WeWork at 1440 Broadway.
“We are constantly re-evaluating — or I use the term ‘reshuffling the deck’ — as to what is the right mix for those teams in those locations,” he said. “Having WeWork has always been an opportunity for us to expand and contract.”
The former Lord & Taylor building, which began welcoming employees in July, has been adapted to the shifts in worker demands and behavior. Since the pandemic began, for example, the focus has been more on collaboration space.
Over the last two decades, conference rooms have shrunk in size, and there is no longer assigned seating — office buildings are structured around the idea of "neighborhoods." There is a rooftop terrace, a dog run, a cafeteria and lounges. The cafeteria has been named after former Lord & Taylor President Dorothy Shaver. Throughout the building, there are various original artifacts from the department store's history incorporated into the design, including original molding detail.
A staircase with plants and circadian lighting, elevators, bathrooms and kitchens have been added. The ground floor of the building has retail space, as well as 1,500 SF of community space that is the result of a partnership with the City University of New York.
The opening comes as employers continue to grapple with how best to deal with remote and hybrid working environments. Across Manhattan, office availability is at a record 19.9%, and workers have been reluctant to return to their office buildings en masse, despite regular prodding from landlords and elected officials.
“What Amazon is doing today, in Lord & Taylor in the remaking of this structure, is realizing the death of a department store becomes the fertilizer of the industry of the future — just as the Amazon jungle, you are making it in the New York City jungle, and I thank you for that,” Adams said in opening remarks at the office ribbon-cutting, where Deputy Mayor Maria Torres-Springer, Economic Development Corp. President Andrew Kimball and Empire State Development’s Steve Gold were present.
“Amazon, you have been just amazing; the way you have brought 18,000 jobs to our regions, this new initiative here [with] 2,000 employees coming in three days a week,” Adams said. “Trust me, they've got to come in more than three days a week. Because you know what? Particularly if you're a young person and you're trying to find yourself a boo — you've got so many restaurants around, you've got to be interacting with folks.”