HBC selling Lord & Taylor building in New York for $1B, partners with WeWork

The Canadian Press</span>
Published Tuesday, October 24, 2017 8:03AM EDT
Last Updated Tuesday, October 24, 2017 8:32AM EDT

TORONTO -- Hudson's Bay Co. (TSX:HBC) is selling its Lord & Taylor Fifth Avenue building in New York to a joint venture between WeWork and Rhone Capital in a deal valued at $1.075 billion.

The agreement will also see workspace company WeWork lease office space within HBC department stores starting in Toronto, Vancouver and Frankfurt.

Rhone Capital will also make an $632 million investment in HBC. WeWork Property Advisors, the joint venture between WeWork and Rhone, is expected to assume part of the investment.

The Lord & Taylor Fifth Avenue building is slated to continue operations in the entire building through the 2018 holiday season before it is redesigned to include WeWork's New York headquarters, WeWork office space and a smaller Lord & Taylor store.

The deals come as HBC faces increased pressure from a U.S. activist investor.

Land & Buildings Investment Management is calling for the removal of HBC's board, arguing the company's shares are worth less than the underlying value of its real estate holdings.

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