Canadian retailer Hudson’s Bay Co said on Tuesday it would sell its Lord & Taylor Fifth Avenue building for $850 million to SoftBank-backed coworking startup WeWork, amid pressure from investors to look for options for its real estate assets.
Hudson’s Bay also said WeWork and private equity firm Rhone Capital would also invest $500 million in the company.
The flagship store at the building in New York would continue operations through the 2018 holiday season after which it will be converted into WeWork’s headquarters, the company said on Tuesday.
New York-based WeWork leases office space and rents it out to individuals and small companies, namely startups.
Hudson’s Bay said the deal would help it reduce debt by C$1.6 billion ($1.26 billion) and ramp up its liquidity to about C$1.1 billion.
The company added that upon closing of private placement, it intends to appoint M. Steven Langman and Eric Gross as additional directors to the board of directors of HBC.
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