It looks like the iconic Lord & Taylor building won’t go condo after all. After speculation earlier this year that the retail chain’s parent company, Hudson’s Bay, would plop a huge skyscraper atop its Fifth Avenue flagship, the company announced today that it would sell the building to WeWork. According to the New York Times, Lord & Taylor will rent the lower floors of the 676,000-square-foot building and scale down the footprint its department store occupies.
The company’s flagship building has been a presence on Fifth Avenue for more than a century; the 11-story limestone structure opened in 1914, and was named a New York City landmark in 2007. At the time of its debut, it was “one of the most elegant large stores ever built in New York,” per one of the late Christopher Gray’s Streetscapes columns. He continues:
Over a limestone base, the architects Starrett & Van Vleck put an Italian Renaissance-style facade of gray faced brick, topped by a giant colonnade of marble and a copper cornice. Delicate ”L&T” relief panels flank the entrance, and Roman-type screens with delicate cresting marked the show windows.
But in recent years, the company has struggled; retail mogul Richard Baker bought Lord & Taylor in 2006, and folded it into the Hudson’s Bay Company after purchasing that in 2008. But that company has been experiencing a downturn as online retailers continue to dominate the marketplace.
As the Times notes, “Hudson’s Bay has seen its stock price fall by nearly a third over the past year,” and one of the firm’s investors noted that “the path to maximizing the value of Hudson’s Bay lies in its real estate, not its retail brands.”
That real estate includes not only the Lord & Taylor store—which will sell to WeWork for $850 million—but also the Saks Fifth Avenue flagship on Fifth Avenue and 50th Street, which has been valued at $3.7 billion. (That same investor, Jonathan Litt of Land and Buildings Investment Management, has floated the idea of turning the Saks building into luxury condos.)
WeWork, meanwhile, will get “prime real estate,” per the Times, for its shared office spaces out of the deal. It has more than 40 of those spaces either operating or in the works in the five boroughs currently, with more on the way.
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.”