Hudson’s Bay Co. has announced a partnership with WeWork Companies and an affiliate of WeWork Property Advisors, to maximize the productivity and value of the retailer’s global real estate assets.

The deal includes the sale of HBC’s Lord & Taylor Fifth Avenue building to WeWork Property Advisors, which will become WeWork’s New York headquarters. The property is valued at C$1.075 billion.

WeWork will also lease space in certain Hudson’s Bay stores including the upper floors of the locations on Queen Street, Toronto and Granville Street, Vancouver.

The deal will benefit HBC with around C$1.6 billion of debt reduction and increased liquidity to around $1.1 billion.

For WeWork, it means an opportunity to partner with HBC across its 61 million square feet of global real estate assets and open WeWork locations within desirable locations.

“The trend of urbanization is something we must all recognize and understand. People from every walk of life are seeking spaces in big cities that allow for human connections, “said Adam Neumann, CEO and Co-Founder of WeWork.

“Retail is changing and the role that real estate has to play in the way that we shop today must change with it. The opportunity to develop this partnership with HBC to explore this trend was too good to pass up,” he added.

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