When Amazon’s back-to-office mandate turned into a real estate headache, WeWork swooped in.
The coworking giant inked a 259,000-square-foot expansion at 1440 Broadway, where it already occupied about 300,000 square feet. It leased the space on Amazon’s behalf.
The August deal is one example of WeWork’s occasional role as a real estate middleman, sourcing and structuring large office deals for clients. Rather than squeezing tenants into its existing portfolio, WeWork is increasingly going to market and securing leases or subleases for clients, a source with knowledge of the deals said.
The model allows companies to bypass yearslong lease negotiations and move into turnkey space in as little as three months, the source said. The short-term deals plug the hole for companies like Amazon as they figure out their post-pandemic office needs, he said.
“We have a membership agreement [with Amazon] that has all the terms, conditions and everything else,” WeWork CEO John Santora said in May at The Real Deal’s New York forum, when asked about the deals. “We now just have to fill in those blanks in terms of the location and the cost.”
Timing couldn’t be more critical for Amazon. The company ordered 350,000 corporate employees back to the office five days a week starting last January. But desks, parking spots and meeting rooms were in short supply. In some cities, including New York, Atlanta and Houston, the company was forced to delay its mandate because there wasn’t enough space to accommodate workers.
WeWork helped bridge the gap. In November, the coworking firm signed a 304,000-square-foot lease at Vornado Realty Trust’s 330 West 34th Street, which it is also operating for Amazon. And in February, WeWork added 112,000 square feet at Brookfield Properties’ 5 Manhattan West on behalf of Amazon, which already occupied 360,000 square feet in the building.
It’s unclear how the coworking deals fit into Amazon’s overall office strategy, or whether the WeWork space is a temporary fix while it builds out more permanent offices. The e-commerce giant also owns the Lord & Taylor building at 424 Fifth Avenue, which it bought from WeWork in 2020 for $1.15 billion and reopened in 2023 to house 2,000 of its employees.
In May, the company bought RFR’s 522 Fifth Avenue for $350 million. And in April, Amazon closed on a 330,000-square-foot direct lease at Property & Building Corp’s 10 Bryant Park. The company did not respond to requests for comment.
“I think that firms need a piece of the real estate that is flex, a piece of real estate that is probably owned, and then there are the traditional leases,” Santora said in May.
The Amazon deals come as WeWork is starting to refocus its business towards cost-conscious growth and partnerships after exiting bankruptcy proceedings in June 2024. While New York remains the center of the Amazon partnership, WeWork has deployed the model in markets like Seattle, Nashville and Silicon Valley. WeWork declined to discuss the financial details of the Amazon deals.
The arrangement could be bad news for office landlords who rely on long-term leases for steady income. The lengths of the Amazon leases are not known, but a source familiar with the deals cited terms of two to five years. WeWork’s leases with the landlord or sublandlord expire at the same time as its agreements with Amazon.
On the flip side, the deals could provide a quick fix for landlords of older properties like 1440 Broadway, which entered special servicing for the second time this summer and has struggled with occupancy.
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