Hudson's Bay Co. has a $1-billion deal to sell its Lord & Taylor flagship store in NY to WeWork Cos and team up with the office-sharing business to run its operations in parts of HBC's stores. Thereafter, the building will be converted into WeWork's NY headquarters and office space, as well as a redesigned Lord & Taylor store of about 150,000 square feet. Though some believed the space would turn into a skyscraper full of condos, the partnership with WeWork more or less suggests that the 11 story limestone, renaissance-style building will maintain its current facade.
No word yet on what this change means for Lord & Taylor's iconic Christmas window displays (or the fake forest that transforms the front of its flagship every holiday season), but the change is expected to happen "after Christmas next year". "By leasing its excess, lower rent, retail square footage to substantially higher rate, traffic driving, shared office space, Hudson's Bay will generate higher revenue and be more productive". On Monday he called a special shareholder meeting to potentially remove directors.
WeWorks will also lease space in other HBC stores-owned in other cities.
One of Hudson's Bay's shareholders, the real estate investment firm Land and Buildings Investment Management, has pushed for the company to sell the Saks store, suggesting it might be desirable to a hotel developer or as bricks and mortar space for Amazon.
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Nakamoto said he would need more evidence of HBC extracting value from its real estate, estimated to be worth $10 billion, before he would consider investing in the company.
The leasing arrangement with WeWork will begin with space in the Hudson's Bay store on Queen Street in Toronto, the Hudson's Bay store in downtown Vancouver and a Galeria Kaufhof in Frankfurt.
Land & Buildings, which held about 5 percent of HBC shares before the announcement, could not be immediately reached for comment.
As part of the transactions, Rhône has invested $500 million of equity in HBC, assuming eight years of mandatory preferred shares at a price of $9.82 per share, subject to adjustment.