After officially filing for Chapter 11 bankruptcy protection last week, WeWork has released a subsequent list of 40 “underperforming locations” across New York City that the company hopes to walk away from over the coming months pending court approvals.
The news was first made public via the Commercial Observer, which also reported WeWork as identifying another 29 properties in the U.S. and Canada it plans to relinquish. The news adds to concerns over the performance of the commercial real estate market in New York and other cities. WeWork had been, until very recently, one of the biggest tenants in Manhattan.
The company has retained Hilco Real Estate to re-negotiate terms on its more than 400 outstanding leases and will allow some members to re-negotiate with landlords directly in certain cases. Current members will be transferred to better-performing locations still operated by WeWork. (The company has a total of 779 properties worldwide.)
The bankruptcy ends a saga that has included an initial $47 billion public evaluation and the eventual departure of founding CEO Adam Neumann in late 2019 in the face of intense scrutiny.
WeWork has reported net losses totaling $694 million and $397 million in Q1 and Q2 of this year alone, respectively. Its stock had fallen and devalued some 50% after the Wall Street Journal first published on the imminence of the bankruptcy filing last week. David Tolley, who was appointed by the board last month, will lead WeWork's reorganization as its new CEO.
1 Comment
more bad news for small businesses and downtowns
who is going to go back to paying $20k a month 10-year leases? nobody.
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