Regus Files For Bankruptcy At Its 1 Concourse Parkway Location
The fallout the coronavirus pandemic is having on an international coworking group's business has now spread to Atlanta.
Regus Corp. has filed Chapter 11 bankruptcy for an affiliated entity that leases space at 1 Concourse Parkway, one of the office towers at Concourse Office Park in Central Perimeter that is capped by the iconic King and Queen buildings.
According to the bankruptcy, filed in Delaware, Regus is reporting a loss of more than $1M on revenues of more than $200K.
This is the latest location in Regus' shared office and coworking chain — including its Spaces format — to file for bankruptcy this month. The firm also placed 10 other locations in bankruptcy, including its Chapel Hill, North Carolina, Fort Lauderdale, Florida, and Chicago venues.
“To attract and retain occupants in this environment, the company has had to cut pricing for new sales and renewals, resulting in a reduction of revenue from the space that is occupied. And with the dramatic contraction of the overall economy during the second and third quarters of 2020, certain Occupants’ inability to timely pay their Occupancy Fees — or unwillingness to do so, as part of their emergency cash-conservation measures — has impacted the Company’s liquidity at the level of the U.S. portfolio,” Duff & Phelps Managing Director James Feltman said in an affidavit filed in Delaware Bankruptcy Court on another of Regus' Chapter 11 filings.
It was not clear in the filing how much space Regus leased at Concourse Corporate Center. But Regus is attempting to get the court to approve a debtor-in-possession financing of $17.5M to help the firm through its bankruptcy, according to documents filed in Delaware Bankruptcy court.
Debtor-in-possession financing, or DIP financing, is court-approved money a company in Chapter 11 can borrow while working out its bankruptcy.
“Given the Debtors’ prepetition capital structure, their challenging business environment, and continuing pressure on the Debtors’ liquidity, it was apparent that the Debtors would need to seek relief under Chapter 11 of the Bankruptcy Code and that they would require access to post-petition DIP financing and use of Cash Collateral for their Chapter 11 cases to preserve operating asset and enterprise values,” Feltman said in court documents.