WeWork finally owns its HQ property

The final closing deadline was Jan. 31

Feb.February 11, 2019 08:22 AM

424-434 Fifth Avenue (Credit: Google Maps)

The We Company has finally closed on its purchase of Lord & Taylor’s Fifth Avenue flagship.

WeWork Property Advisors, an investment vehicle managed by the We Company and private equity firm Rhône Group, announced it would buy the building from Hudson’s Bay Company in October 2017 for $850 million.

“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 spokesperson for the company said in a statement.

The transaction was scheduled to close in August 2018 but WeWork extended the deadline twice, to Jan. 31, by making payments of $50 million to the seller, HBC. The Canadian retail giant also took a minority stake in the building worth $125 million.

A source familiar with the deal the closing pushed past its final deadline because of “piles and piles and piles” paperwork. The We Company and HBC declined to comment.

Last week, sources confirmed that Eastdil Secured negotiated a $900 million loan for WeWork from JPMorgan Chase, Starwood Property Trust and a third unknown lender. Roughly $600 million was to become available to WeWork at the closing. Including the two $50 million payments to extend the closing, HBC’s equity and WeWork’s initial $75 million deposit, WeWork still owed HBC $600 million at the time of closing.

The remainder of the loan will fund the building’s renovation — a portion of which will be used as The We Company’s headquarters.

Work permits to begin repositioning of the century-old department store at 424 Fifth Avenue were obtained weeks ago by Bjarke Ingels’ firm, the We Company’s chief architect.

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