Keep your friends close and your competitors closer. Co-working company Jay Suites signed a 17-year sublease for 90,000 square feet of office space at 15 West 38th Street, and is set to become WeWork’s neighbor.
The property sits next door to the Lord & Taylor Building, which WeWork and partner Rhone Capital bought for $850 million from Hudson’s Bay Company last year and which will serve as its new headquarters.
Jay Suites is subletting Rosen Group-owned 15 West 38th Street from Hudson’s Bay, the Canadian mall operator in which a WeWork-affiliated investment fund owns a stake. And to top it all off, Sean Black of BLACKre, a former WeWork real estate executive, represented the tenant in the deal. Hudson’s Bay had 17 years remaining on its lease.
Cushman & Wakefield’s Laura Pomerantz and Maria Travlos represented Hudson’s Bay. The asking rent was $45 per square foot, according to Srour.
In a statement, Jay Suites’ co-founder Juda Srour said he gets along well with WeWork’s co-founder Adam Neumann and that the two “have a great partnership going on.”
Jay Suites plans to spend more than $10 million to spruce up the 12-story property and add a conference center, a rooftop terrace and a cafe. The company also plans to move its headquarters into the building, which is connected to the neighboring Lord & Taylor building through a bridge.
“We have been waiting opportunistically and for quite some time to expand our presence in the heart of Midtown,” Srour said.
Jack and Juda Srour
The new location will be Jay Suites eighth location and its largest to-date. Brothers Jack and Juda Srour, fresh out of school at the time, founded the company in 2009. “We really look at where Regus is located, and we try to open next door,” Juda told The Real Deal in 2014.
Previously, the company’s latest reported lease was a November 2014 deal for 18,000 square feet at 315 Madison Avenue. Black, then at JLL, brokered that lease as well.
Black joined WeWork in March 2015 as an executive vice president in charge of the company’s east coast expansion. In October 2016 he caused a stir by making disparaging remarks about Jersey City at a conference. “If you look at Jersey City, it’s so far ahead relative to a lot of different product it has, but it doesn’t have life, it doesn’t have vibrancy, it’s not cool, it’s got no vibe,” he said, which drew outrage from Jersey City residents on social media. Days later, he was out at WeWork. He went on to launch the brokerage BLACKre and recently brokered a 40,000 square-foot lease for NYC Office Suites at Rockefeller Center.