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The deal will see HBC continue to run the store in the location on 5th Avenue until the end of next year, at which point it will be converted into WeWork’s new headquarters, and a smaller Lord & Taylor store.
“This is a transformative partnership that rethinks how retailers create exciting environments and leverage less productive space, while substantially improving the value proposition,” HBC’s interim CEO, Richard Baker, said in a statement.
HBC had been under pressure from an activist shareholder to monetize its real estate assets, which by some estimates are worth more than the entire company. The deal has a price tag of just over $ 1.075 billion Canadian.
As part of the deal, financing firm Rhône Capital, which has worked with WeWork in the past on real estate deals, will make a $ 632-million equity investment in HBC, to help shore up the retailer’s balance sheet.