WeWork said it plans to assume 89 additional leases in the United States and Canada as the global flexible workplace provider is scheduled to try to exit from Chapter 11 bankruptcy on May 30.
The New York-based company is keeping the additional leases in cities including Raleigh, North Carolina; Montreal; and San Francisco in the United States and Canada, where its bankruptcy case applies, the company said Monday in a statement. The new leases it’s assuming came a week after nine others the company said it’s also retaining, including at 201 Spear St. in San Francisco and 430 Park Ave. in New York.
With the latest batch of leases, the high-profile company that had rapid growth — and spending — in the decade after its 2010 founding said it’s completed its lease portfolio review in a vast majority of its markets, including top cities such as Chicago, Denver, Houston, San Francisco, Salt Lake City, Seattle, Vancouver and Washington, D.C. In those cities, WeWork said it’s keeping its “strongest and most popular locations.”
WeWork is still finishing up its review on other markets, including its home city of New York, Los Angeles, Miami, Maryland and Toronto and Calgary in Canada, a company spokesperson told CoStar News. The additional leases WeWork seeks to retain are still subject to bankruptcy court approval.
WeWork also is assuming seven additional storage leases and nearly 400 more nonlease contracts, including a lease administration agreement with Cushman & Wakefield, according to a court filing WeWork made late Friday. Meanwhile, it’s rejecting five other leases and 70 nonlease contracts, including several tied to its acquired Common Desk operations.
To date, WeWork said it’s settled on the fate of over 97% of its global, wholly owned lease locations, adding it's projected to reduce its total rent commitments by over $11 billion. The company said it expects to operate more than 170 locations across the United States and Canada and 337 locations globally after it emerges from Chapter 11.
WeWork has been attempting to renegotiate leases with landlords to cut its lease expenses, the biggest challenge to WeWork becoming profitable. The company has said it hopes to turn profitable next year after emerging from bankruptcy protection and end this year with an occupancy rate of 76% that it projects would rise to 85% by the end of 2028.
Part of its lease review has led to WeWork announcing it’s rejecting its headquarters lease at 12 E. 49th St. WeWork's workplace management software partner Yardi is expected to be its majority owner if WeWork's reorganization plan to exit bankruptcy is approved by the court.
Here are some examples of the list of 89 additional leases across North America that WeWork plans to keep:
- 625 W. Adams St., Chicago
- 1920 McKinney Ave., Dallas
- 600 B St., San Diego
- 1450 Broadway, New York
- 360 NW 27th St., Miami
- 501 Boylston St., Boston
- 501 E. Kennedy Blvd., Tampa, Florida
- 120 W. Trinity Place, Decatur, Georgia
WeWork is a tenant in a Virginia building CoStar Group acquired earlier this year, making CoStar a creditor in the bankruptcy case. CoStar also competes with Yardi in providing real estate data.