On this episode of Bisnow Reports, we discuss the looming possibility of a WeWork bankruptcy and how such an event would play out in the commercial real estate ecosystem, especially in some of the coworking company's major markets like New York and London.
WeWork announced earlier this month that it wouldn't make interest payments of about $95M, making many observers suggest bankruptcy is just around the corner unless the company can drastically turn around its finances.
The company has a 30-day grace period in which to make the payments, and it also said it has enough cash on hand to do so — $205M, plus a $475M credit line. But withholding payments is sometimes an approach used by corporate debtors in the process of renegotiating terms, and some of WeWork's large spaces in places like New York City are already coming back to the market.
“WeWork’s been fighting a rearguard action for pretty much four years solidly now,” Phillips said, referring to WeWork's troubles with its botched initial public offering in 2019. “Certainly recently, the losses have been huge. It’s not new news for landlords in that sense. They’ll have known this moment was coming, and some of them would’ve prepared for it and some of them won’t.”
Bisnow’s audio series, Bisnow Reports, examines every facet of the international commercial real estate industry — from the murky future of retail and office to real estate’s reckoning with diversity to the effects of climate change on the built world, and so much more. You can subscribe on Apple Podcasts, Spotify and Amazon Music, or click below to listen in your browser.
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