Latest WeWork News: $438 Million Renovation Of New York Lord & Taylor Building Underway

WeWork, which is undergoing a restructuring in the wake of a failed initial public offering, is renovating the Lord & Taylor building in New York for $438 million, Hudson Bay, which holds a $125 million stake in the structure, said in a filing.

The 680,000-square-foot building, which opened in 1914, will have nine floors of office space atop two floors of retail space and a basement food court. Hudson Bay sold the building to the co-working company in February for $850 million.

The filing comes as the company reportedly opened its search for a new CEO to replace Adam Neumann, who was forced out following the IPO’s failure. Co-CEOs Artie Minson and Sebastian Gunningham have been running things since Neumann’s ouster in the wake of several scandals, but majority owner SoftBank Group, which now owns an 80% stake in the company, is pushing for the change in leadership.

Among those reportedly under consideration is T-Mobile CEO John Legere, Reuters and the Wall Street Journal reported. He’s known as an outspoken critic of larger competitors Verizon and AT&T. T-Mobile currently is involved in a merger with Sprint that is awaiting regulatory approval.

SoftBank wants WeWork to return to its core business: renting trendy office space to freelancers and companies. SoftBank said last week it plans to sell off non-core businesses.

SoftBank offered a nearly $10 billion bailout for WeWork last month to avert bankruptcy but postponed a $3 billion tender to current shareholder, many of whom are employees, that had been scheduled to begin Wednesday, The Real Deal reported, citing sources.

Losses for WeWork more than doubled in the third quarter. It lost $1.25 billion in the quarter ending in September, up from $497 million in the 2018 quarter, despite a 94% increase in revenue to $934 million, the New York Times reported. About a third of the company’s 12,000 are expected to be laid off.

Minority shareholders filed suit this week over the failed IPO against Neumann, SoftBank head Masayoshi Son and board members, accusing them of self-dealing and enriching themselves. WeWork’s valuation fell from $47 billion to $8 billion, forcing it to cancel its IPO.

The complaint filed by former WeWork employee Natalie Sojka says mismanagement of the IPO allowed SoftBank to increase its stake through a “fire sale” and also attacks Neumann’s $1.7 billion severance package. The suits seeks class action status.