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WeWork has renegotiated another set of leases, maintaining its presence in seven U.S. locations and one in Canada as it attempts to emerge from Chapter 11 bankruptcy.
Two of the locations it is holding onto are in the Midtown South area of Manhattan, while three others are in California. While three of the landlords won't be receiving any initial cash as part of the lease assumptions, WeWork has agreed to cure nearly $2M in rent arrears at the other five locations, according to a document filed in New Jersey bankruptcy court.
WeWork secured reduced rent at all eight locations and reduced the size of its location at three of them.
“We’re grateful to our landlords for their ongoing partnership and for believing that WeWork’s flexible workspaces are an asset to their properties,” WeWork Global Head of Real Estate Peter Greenspan said in a statement. “We’re steadily approaching a portfolio of locations poised for long-term success and look forward to continuing this momentum.”
WeWork is keeping its leases, with amendments to its contracts, at the following locations:
18 West 18th St., New York, New York
135 Madison Ave., New York, New York
1275 Avenue des Canadiens-de-Montréal, Montreal, Quebec
333 West San Carlos St., San Jose, California
400 Capitol Mall, Sacramento, California
10250 Constellation Blvd., Los Angeles, California
1600 7th Ave., Seattle, Washington
1155 Perimeter Center W, Atlanta, Georgia
As of the latest filing, WeWork has assumed a total of 21 leases as part of the bankruptcy process and rejected 93, according to a spokesperson. The company has also renegotiated over 100 leases globally, with more than more than $1.5B in total rent savings, the spokesperson said.
In its initial bankruptcy filing, WeWork said it had a combined 292 locations in the U.S. and Canada, which means the company hasn't decided whether to keep or reject more than half of its North American buildings. The impacts of the decisions could have ripple effects for years.
The owner of 57 E. 11th St., where WeWork signed a 15-year lease in 2018 for the entirety of the building’s 61K SF office space, fell behind on its debt payments after WeWork rejected the lease, and the $55M loan tied to the building was sent to sent to special servicing last week.
Landlords where WeWork hasn't made a decision are getting increasingly impatient with the company's strategy of withholding rent during negotiations. CoStar Group, which acquired a Virginia building partially leased to WeWork last month, asked the judge overseeing the restructuring to force the company to pay more than $3M in unpaid rent or reject the lease, Bisnow reported.
WeWork has also again extended the deadline for filing its annual financial report, CoStar reported. The company attributes the delay to its continued search for a new independent registered public accounting firm, following Ernst & Young’s resignation in November.
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