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What happened to WeWork’s planned acquisition of 424 Fifth Avenue?

The co-working giant still hasn’t closed on the deal

424 Fifth Avenue (Credit: Lord & Taylor)

WeWork still hasn’t closed on the acquisition of 424 Fifth Avenue (AKA Lord & Taylor building). After signing a contract for $850 million 11 months ago, the co-working giant is still seeking an equity partner to close on the deal. Although the closing deadline has been extended to November, the task of raising money will not get easier.

Dubious pitch: Even though the fund is co-managed with the Rhone Group, the pitch calls for WeWork to tenant its own buildings. As both a tenant and landlord, the fund claims it could yield better returns than conventional real estate funds.

Double Dipping: This arrangement allows WeWork to be on the both sides of the deal while using investors money. It raises the potential for conflict of interests.

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