Amazon is shelling out $1.15 billion in cash to acquire the former Lord & Taylor flagship in Midtown Manhattan, The Post has learned.
The Fifth Avenue landmark, which spans 11 stories and 660,000 square feet, will serve as Amazon’s New York City headquarters, housing some 4,000 employees who will move into the building in about 18 months, a source close to the situation said.
That’s a switch from the plan two years ago, when the former department-store space had been leased by WeWork to become the office-sharing startup’s own headquarters. WeWork’s plans fell apart last fall, when the company became engulfed in a slew of scandals that derailed its bid to go public.
Indeed, the lion’s share of the deal consists of Amazon paying off $750 million in construction loans taken out for WeWork’s lavish renovation of the space, sources said. The remainder consists of more than $350 million in equity for the building’s current owners.
WeWork has waived any economic interest in the building in exchange for getting out of the lease, and co-founder Adam Neumann will not make any money on the deal, sources said.
Amazon is paying effectively more than $2,000 per square foot for the midtown property, according to a source.
Amazon had been in on-again, off-again talks for the past several months with the building’s owners, which include a joint venture between WeWork’s parent company and the hedge fund Rhone Capital; and Hudson’s Bay Co., the owner of Saks Fifth Avenue, sources said. The consortium bought the building for $850 million in late 2017.
Over the past 60 days, the talks heated up as Amazon saw rivals pursuing their own Big Apple deals. While Facebook has been in talks to lease the 700,000-square-foot Farley Building, Apple last month inked a lease on 220,000 square feet at 11 Penn Plaza.
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