WeWork Planning Space In Saks Fifth Avenue Stores As Coworking Sees Revival
WeWork is planning to manage and staff coworking space in five Saks Fifth Avenue locations in New York City starting in September, and possibly other parts of the country after that, The Wall Street Journal reports. The new venture will be called SaksWorks.
The owner of Saks, Canadian department store company Hudson's Bay Co., will also convert some space in its Lord & Taylor stores into WeWork-managed coworking space. HBC is considering letting WeWork operate space in metro Los Angeles, Seattle, Philadelphia and Boston.
HBC, which was acquired by investor Insight Partners last year, recently spun off the e-commerce businesses of its Saks brands, retaining ownership of the brick-and-mortar stores. After Insight took HBC private, it created a real estate-specific arm of the company called HBC Properties and Investments.
In striking the deal with WeWork, HBC apparently is looking to take advantage of the resurgence in interest in coworking space as department stores circle the drain. Demand for coworking space increased 41% nationally from Q1 to Q2 of this year, according to flex office data and analysis platform Upsuite.
In places such as New York City, whose coworking market the coronavirus pandemic crushed, the resurgence has been particularly strong. There was a 156% increase in NYC flex office deals quarter-over-quarter in Q2, according to Savills’ flex office arm, Workthere.
The HBC deal isn't the first time that HBC and WeWork have partnered. In 2017, when both companies were under different management, they agreed to a deal that included the sale of Lord & Taylor’s Manhattan flagship for $850M to a joint venture of WeWork and private equity firm Rhône Capital.
WeWork agreed to pay market rent to lease the top floors of some Hudson's Bay department stores, which it converted into coworking space. Later, as WeWork imploded following its failed IPO in late 2019, the coworking company sold the Lord & Taylor Manhattan property to Amazon for a reported $1.15B.
