WeWork’s bankruptcy court judge approved its initial request to reject 67 unexpired leases in a sign the reorganization is making progress as the flexible workspace provider also requests to reject another six leases.

U.S. Bankruptcy Judge John Sherwood, who is handling WeWork’s Chapter 11 bankruptcy case it filed Nov. 6 in the U.S. Bankruptcy Court for the District of New Jersey, on Wednesday approved WeWork’s request to reject 67 leases. While WeWork originally sought to reject 69, mostly in New York, a WeWork spokesperson told CoStar News two separate office and storage leases, both at 311 W. 43rd St. in Manhattan, were removed from its list after WeWork and the building landlord realized the leases had already ended before its filing.

WeWork also is seeking to reject another six leases, mostly in New York, at 130 Fifth Ave. and 880 Third Ave. in Manhattan; 245 Livingston St. in Brooklyn; and 35-37 36th St. in Astoria, Queens, according to a court document filed Thursday. Two other locations are at 75 Arlington St. in Boston and 1623 N. Hall St. in Dallas.

The locations on the new list, like those on its original list, no longer are operational, the WeWork spokesperson said. "We continue to proactively engage with our real estate partners to better align our long-term financial interests and find mutually beneficial lease agreements,” the spokesperson told CoStar News in an emailed statement. “We plan to stay in the vast majority of markets as we move into the future.”

WeWork has said it's renegotiating lease deals with at least 400 landlords around the world, and that those obligations remain the biggest obstacle to its ability to turning profitable.

The company's next bankruptcy court hearing is scheduled for Wednesday.

Started in 2010 by its charismatic co-founder Adam Neumann, WeWork gained a high profile with fast growth, including at the cost of paying above-market rents, in the years following its founding. At different times, it became the largest private office tenant in cities including its home market of New York, WeWork has said.

Its lease rejections affect only locations in the United States and Canada, where the bankruptcy filing applies. WeWork has said performance in the two markets far trails its other markets, hurt in part by increased competition, including that from its landlords and an increase in sublet inventory.

For instance, third-quarter revenue in the United States fell to $305 million from $360 million, even as its revenue in the United Kingdom, Japan and other foreign countries gained, the company reported in November.

In a telling sign of its lease burden, while WeWork’s lease obligations reported in its third-quarter results recently dropped to $906 million from $936 million a year earlier, that amount alone topped what the company booked in revenue.

Since 2019, WeWork has amended over 600 leases and executed 295 full exits, cutting about $13.3 billion in total future undiscounted fixed minimum lease cost payments, the company said last month.

WeWork may emerge "a much smaller company," Paul Aloe, a bankruptcy attorney at law firm Kudman Trachten Aloe Posner who represents some of the Manhattan locations that WeWork rejected, said in an interview. “They can’t survive under the current circumstances.”

When asked to comment specifically on Aloe's take, the WeWork spokesperson, without elaborating, referred to CEO David Tolley’s public letter in September that said WeWork intends to remain in the majority of its buildings and markets.

Aloe on Nov. 21 filed a limited objection concerning the effective date of rejection on three locations — 419 Park Avenue S, 315 W. 36th St. and 130 Madison Ave. — that WeWork has on its original list. He withdrew the limited objection a day later after WeWork reached out to resolve the difference, he said.

The locations are owned by New York landlord Walter & Samuels, a major unsecured creditor in WeWork’s bankruptcy case.

“Bankruptcy isn’t a perfect world and often counterintuitive,” Aloe told CoStar News. “We [as representatives of landlords] may not like [the fact] WeWork has filed for bankruptcy, [but] there are some provisions in the code to help landlords. It’s like a chess game. … Any landlord whose tenant files for bankruptcy needs to immediately get counsel. The landlords have to be proactive [in] protecting their rights under the statute.”