WeWork sublets Midtown space to Santander

Santander Bank is relocating its headquarters as part of an unconventional agreement with WeWork.

The co-working company sublet about 160,000 square feet at 437 Madison Avenue in Midtown to Santander Bank. WeWork will manage the space,  which is located three blocks away from Santander’s current headquarters.

A spokesperson for Santander confirmed the move, while a representative for WeWork declined to comment.

WeWork leased about 362,000 square feet in the 40-story office building owned by the William Kaufman Organization and Travelers Companies in late 2019 on the eve of its failed IPO. The company, which went public via a SPAC merger in the fall, reportedly put down a hefty security deposit and took over the space in January of last year when the lease held by former tenant Omnicom expired.

The coworking company was planning to operate the location under its enterprise program targeting large corporate users. However, a source familiar with the location said Santander was intent on taking the space via a sublease.

The asking rent for the space was about $90 per square foot.

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WeWork was represented by a JLL team led by Clark Finney, while Santander was represented by an Avison Young team led by Arthur Mirante and Mitti Liebersohn. The brokers either declined or did not respond to requests for comment.

Santander is relocating its headquarters from 45 East 53rd Street, a building that was custom-built as the Spanish lender’s U.S. office in the early 1990s. Santander sold the building in 2012 for $120 million.

WeWork, meanwhile, is still working its way toward profitability.

The company reported an EBIDTA loss of $802 million for the third quarter, its first earnings report as a public company after it merged in October with a SPAC sponsored by venture capitalist Vivek Ranadivé’s Bow Capital. Despite the hit, the figure was an improvement from the loss of $941 million a year earlier.

The company’s SPAC, however, has disappointed — as has much of the blank-check space. The stock is trading at about $7 per share, down from a high of roughly $13 per share when the merger was finalized in October.