By: Veronica Kordmany
There have been recent reports of Amazon consuming the Fifth Avenue Lord and Taylor building, which is currently owned by WeWork, an American real estate company that caters to technology companies. The e-commerce titan has been in talks of securing this acquisition, which sources say is a deal worth almost $1 billion. However, the deal is still in the preliminary stages, and is long away from solidifying.
Neither Amazon nor WeWork gave the press a comment on the news.
Amazon’s success on this acquisition would result in significant implications, not just for the online-shopping mogul, but for both parties. It would be Amazon’s largest real estate purchase, which is what WeWork’s purpose is.
Just last summer, the pair were planning for Amazon to lease the Lord and Taylor business. The deal apparently fell through, after Amazon leased both office and warehouse spaces in another part of New York City. In December, it was a 335,000-square-foot lease at SL Green Realty, located at 410 10th Avenue on the Far West Side of Manhattan. The tech giant is also negotiating the possibility of leasing RXR Realty, and LBA Logistic’s 770,000-square-foot center in Maspeth, Queens.
This purchase would make up for Amazon’s famous failure in February 2019, when it was forcibly revoked from New York after its Long Island City headquarters fell apart.
While Amazon is throwing money in every direction, this building proves to be sentimental for WeWork, as it commemorates one of the last big-spends orchestrated by former CEO Adam Neumann. They need this sale to generate some much-needed capital, after WeWork was taken over by SoftBank, the company’s biggest backer.
WeWork is currently shelling out $200 million to renovate the 10-story, 106-year-old building. The renovation would be another gesture for Amazon’s potential purchase, according to some sources. Despite it’s best efforts, several employees of WeWork went public with their concern over the deal’s astronomical price and the perceived conflicts of interest, one of which being that a board member held interests interests in the buyer, seller, and tenant.
Furthermore, the negotiations became more difficult to close when WeWork was forced to agree to lease the entire building, in order to satisfy the wants of its lenders, after its everlasting occupant Lord and Taylor ditched their space. The disruption raised eyebrows at spectators, who watched as WeWork’s real estate team went head-to-head with ARK over the leasing price, many of which believed to be too high.
