Bankrupt WeWork Owes Boston Landlords Over $7M, Seeks To Exit 2 Leases In City
WeWork's much-anticipated Chapter 11 bankruptcy filing Monday night revealed new information about how its restructuring could affect Boston's office market.
Along with the filing, WeWork listed its 30 largest unsecured creditors, and three of them were Boston property owners that were owed more than $7M combined. The company also released a list of proposed lease rejections that included two Boston locations.
The largest of the Boston-based creditors was Beacon Capital Partners, which is owed $3.5M in unpaid rent and lease termination fees. It also said John Hancock Life Insurance Co. is owed $2.3M in unpaid rent, and Unitarian Universalist Association is owed $1.6M in lease termination fees.
One of the properties WeWork owes rent on is 24 Farnsworth St., a building UUA owns, but the other properties weren't listed in the filing. John Hancock owns the 200 Berkeley St. building WeWork occupies.
As part of a 65-property list of leases it is asking the bankruptcy court to reject, WeWork included two Boston spaces totaling 118K SF. The locations are 40 Water St., owned by a partnership of Hana Financial and KTB Asset Management, and 100 Summer St., owned by Rockpoint.
Beacon Capital, John Hancock and Rockpoint declined to comment. UUA and Hana Financial didn't respond to requests for comment.
In a Monday night press release on the bankruptcy filing, WeWork said the company is continuing to operate its coworking spaces and is going through restructuring to ensure it has a “bright future.”
“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” WeWork CEO David Tolley said in a release.
A WeWork spokesperson told Bisnow in a statement that Boston is still an important market for the coworking firm.
“Boston remains a key market for WeWork and we are fully committed to providing our members here with world-class, flexible workspace solutions for the long term,” the spokesperson said. “Our commitment to the city is unwavering as we continue to work collaboratively with our landlord partners, aiming to craft solutions that set all parties up for sustainable success.”
WeWork has 11 Greater Boston locations listed on its website, but it no longer lists the 40 Water St. and 100 Summer St. spaces. The company recently removed 45 U.S. locations from its website, CoStar reported Monday.
The operator's remaining Boston locations range from older to newer buildings, including Fortis Property Group's One Lincoln Street and 200 Portland St., a Class-B building 55% leased by WeWork, Banker & Tradesman reported. WeWork has signed over 900K SF of leases in Boston and Cambridge.
Earlier this year, WeWork quietly exited 120K SF at Capital Properties and Madison International Realty's 31 St. James Ave., Bisnow first reported in April.
