More than two dozen of WeWork's U.S. landlords have withdrawn motions in recent weeks that asked a bankruptcy court to make the coworking space provider pay rent, a development that shows some progress in negotiations for WeWork to emerge from bankruptcy protection.

But there's significant work left to do: The New York-based company reached new lease agreements for about 3% of its nearly 300 U.S. locations tied to its bankruptcy case as of last week. The fate of almost 200 leases are still unknown, a spokesperson for the company told CoStar News, but WeWork to date has sought to reject nearly 90 U.S. leases through the Chapter 11 process.

About 24 U.S. landlords withdrew motions in the week leading up to a hearing scheduled for Feb. 20 that asked the court to make WeWork pay rent after reaching conditions with the company, according to court filings. Details weren't disclosed and WeWork declined to comment beyond court filings.

WeWork filed for Chapter 11 bankruptcy protection in November after holding too many leases at too high a cost. The company, credited with expanding demand for coworking space in the decade after its 2010 founding, has struggled to keep up with rivals as it remains weighed down by expensive lease obligations signed before the COVID-19 pandemic. The high-profile firm could further roil a struggling U.S. office market by making coworking space providers appear to be a risky bet, according to some real estate professionals.

The company plans to share additional information about its leases this week or next, the spokesperson said. It is seeking new financing to fund its elongated negotiation process with landlords as it tries to reduce future rent payments, with a spokesperson telling CoStar News: "we have a clear line of sight to a profitable, sustainable WeWork."

Office leases, such as the ones often signed by WeWork, are used to underwrite the valuation of an office building, with a company's ability to reject or renegotiate a lease in bankruptcy proceedings often undermining the financial backing of a property.

Globally, WeWork has renegotiated leases with more than 80 building landlords, including locations that are not tied to the U.S. bankruptcy case, in talks that started before it filed for bankruptcy, the WeWork spokesperson said. Those 80 agreements are expected to save the company more than $1.5 billion in rent. Additional rent savings are expected. WeWork didn't comment further on its savings as of Monday. WeWork declined to identify the locations of the 80 renegotiated leases.

WeWork's 10 new lease agreements negotiated as part of U.S. bankruptcy proceedings include three the company announced last week: a deal with Carr Properties in Washington, D.C., a property in Atlanta, and its first revenue-sharing agreement reached through bankruptcy court at a location in Portland, Oregon.

It's not yet clear if WeWork's decision to withhold as much as $33 million in January rent in total from a portion of its landlords in an attempt to rework lease agreements was successful.

U.S. bankruptcy code requires companies to fulfill their obligations under a lease after filing for bankruptcy protection until a lease is rejected through the court. If WeWork violates U.S. bankruptcy code, it could jeopardize its restructuring efforts, putting the case at risk of being converted into a Chapter 7 liquidation, said Sidney Scheinberg, who chairs the bankruptcy and creditors rights section of Godwin Bowman PC law firm and is not involved with WeWork's case.

In Chapter 11 bankruptcy cases, debtors have 120 days from the petition filing date to either reject or assume a lease, he said. WeWork filed for bankruptcy on Nov. 6, so the company's 120-day window ends March 4.

"They may have to seek additional time, but I imagine they are playing a high-stakes game of poker," Scheinberg told CoStar News. "A bankruptcy court can only force a debtor to assume or reject a lease, it doesn't have the power to order a lower or higher rent. They are probably using all of the negotiation ploys they can with the threat of empty office space being held over landlords."

WeWork declined to respond directly to Scheinberg's comments, but said in a general statement to CoStar News, "WeWork is confident in our ability to successfully navigate the Chapter 11 process and emerge a financially strong and sustainable company.”

Without knowing the details of WeWork's balance sheet, Scheinberg said the company's decision to assume or reject leases — which can only happen during a Chapter 11 bankruptcy — could play a pivotal role of making or breaking the business in time.

WeWork's goal is to stay in as many buildings as possible, according to professionals familiar with the company's plans, with the aim of reducing its monthly rents to become a profitable business. The company was one of the most valued startups in U.S. history, peaking at $47 billion in January 2019 before its failed initial public offering.

WeWork adopted a formula of leasing and renovating office space to make it high-end and modern, providing a mix of spaces that allowed for some desks to be rented individually on very short-term leases, while, in others, companies could take larger portions of offices.

The onset of the pandemic upended WeWork's business strategy, with it "significantly, and perhaps permanently, chang[ing] the way people work and the demand for office space," WeWork said in a disclosure statement it filed with the court this month.

"Rapidly rising interest rates have compelled landlords and office tenants alike to enter the commercial real estate market, offering leases and subleases at reduced rates and more flexible terms and creating significant competition for WeWork’s target customers," the company said, adding "WeWork’s existing business became increasingly difficult to maintain in the changing real estate market."

Some of WeWork's landlords have accused the coworking company of dragging its feet in negotiating revised lease teams even as WeWork is using the space it leases and collects on membership dues.

In Dallas, landlord City Office REIT of 5960 Berkshire Lane in the Preston Center neighborhood told the bankruptcy court it has "waited patiently in limbo for the debtor to determine whether it intends to assume or reject the lease" for nearly 50,000 square feet of space. But the lease has yet to be rejected or assumed with WeWork electing to withhold its January 2024 rent on the space totaling $257,028, according to the filing.

That decision to not pay rent led to City Office REIT incurring additional attorney fees and expenses, the landlord told the court in its motion to compel. The REIT pulled its motion in mid-February, saying it reached "a stipulation" with WeWork.

The ownership group behind Williams Square in Irving, Texas, a Dallas-area suburb, told the court it was forced to draw on a letter of credit to mitigate WeWork's unpaid rent totaling $148,347 in January, according to a court filing. The ownership group is a partnership between Apollo Global, Vanderbilt Office Properties and Hillwood Urban. The landlord reached an undisclosed stipulation with WeWork in February.

Before reaching the stipulation, John Dempsey, a representative of the landlord for Williams Square, told the court that WeWork is not "focused on addressing the lease at this point in time." The landlord and its counsel "have actively attempted to engage with" WeWork and its advisers in lease negotiations without success, Dempsey said.

And Invesco Real Estate, the owner behind 1920 McKinney Ave. in Dallas, also reached a stipulation with WeWork this month. Before reaching the deal, an attorney on behalf of Invesco Real Estate said WeWork is using "an improper lease negotiating tactic" with Invesco and other landlords, by withholding rent in an effort to leverage ongoing lease negotiations, according to court filings.

In doing this, the attorney said WeWork was seeking to "finance these Chapter 11 cases at the expense of many of [its] landlords."

WeWork's lawyers said in a filing to the court the company's restructuring plan "will require everyone to shoulder some of the load" with most of its landlords continuing to be "constructive business partners."

A WeWork spokesperson told CoStar News,"We are extremely grateful to those landlords for their constructive engagement and remain committed to finding mutually beneficial solutions that are better aligned with today’s market conditions and that will enable us to successfully move forward in our restructuring process."

WeWork's lease assumption in Portland at 830 NE Holladay St. represents the company's first alternative lease structure agreement it has reached with a landlord through bankruptcy proceedings, WeWork said in a statement. WeWork leases the entire building in the Lloyd District and the new agreement with landlord American Asset Trust involves splitting revenue. WeWork said the deal concludes the company's lease negotiations in the Portland market.

WeWork's next status hearing on its bankruptcy case is scheduled for March 20. A supplement to WeWork's bankruptcy plan that could include real estate details is expected to be filed by April 18, according to the company's disclosure statement filed with the bankruptcy court.