Amazon is reportedly considering leasing a building in the famous Fifth Avenue area of New York. The building is currently owned by WeWork, and was formerly the flagship location of the shopping brand Lord & Taylor, according to a report by The Wall Street Journal.
The eCommerce company may lease the entire building, which is 12 stories and could house as many as 4,00 employees. The company has also talked about only leasing a portion of the building. Amazon has been searching all over the city, including the historic Farley Post Office, to find new office space.
In February, the company shelved plans to build a new headquarters in Long Island City, Queens. It had promised to spend $2.5 billion over 10 years and bring in 25,000 jobs. The deal attracted a lot of criticism about issues like rising real estate costs, potential traffic problems and concerns over $3 billion in tax incentives Amazon would have received.
Amazon already has about 5,000 workers in office buildings around New York City, spanning fields like advertising, cloud computing and fashion. The company was attracted to the city because of its high density of tech workers.
Whether Amazon will begin hiring for the new space or just relocate existing workers is not known, and it’s also unclear whether Amazon will install any of its other stores, like an Amazon Go or a bookstore, in the space.
Hudson’s Bay Co., which owns Lord & Taylor, sold the building to WeWork in 2017 for $850 million, but the deal didn’t go through until February. The plan was to make the building the WeWork headquarters.
WeWork’s usual business model is to lease a building and then sub-lease refurbished parts of it to companies like Amazon. However, Amazon may sign a long-term lease and pay upwards of $110 a square foot for the space, which might be more than what WeWork pays for it now.
According to the CBRE Group, average rents in midtown Manhattan in Q1 were in the neighborhood of $87 a square foot.