WeWork Is Backing Out Of A Big Lease In Manhattan
Embattled coworking firm WeWork is pulling the pin on an anchor-tenant lease in New York City, potentially losing millions of dollars in the process.
The company is pulling out of a deal to lease 115K SF at Columbia Property Trust’s 149 Madison Ave., Business Insider reports. The landlord had set aside almost $16M for a retrofit for WeWork, per the publication.
WeWork is now valued at less than $3B, a significant drop from the $47B early last year. Its bid to go public last year went belly-up and its biggest backer, SoftBank Group, has since said it is pulling out of a promised bailout plan. Company CEO Sandeep Mathrani said the firm, which was criticized for keeping its locations open throughout the pandemic, is rethinking about 20% of its leases.
Columbia Property Trust CEO Nelson Mills told investors in October that in the wake of the failed IPO, it was not clear if WeWork would still occupy the space at the Madison Avenue building.
“If [WeWork has] the ability and the desire to continue the space, then they'll be a great tenant and great outcome. If that changes for any reason, we're very confident that that building would be in high demand,” he said at the time.
Mills said on Bisnow’s podcast in April that WeWork was due to move in and begin paying rent in summer.
“Even before this outbreak, there was a lot of concern about WeWork with the high-profile events of the fall,” he said in the interview. “Hopefully we have WeWork as a tenant for years to come; if not, we’ll have other options for it down the road.”