WeWork, saddled with leases that have drained its cash flow and hurt its ability to stem losses, has removed at least 45 United States locations from its website since August, the same month the company warned "substantial doubt exists" about its ability to continue as a going concern.
The flexible office space provider, which has been renegotiating nearly all its leases, has taken down the listings since Aug. 20, according to CoStar Group monitoring of WeWork’s website. New York, WeWork’s home market, alone accounted for 23, or about half the locations being removed from the United States market. The listings are used by individuals or companies to book some of WeWork’s flexible office space.
WeWork announced late Monday that it filed for Chapter 11 bankruptcy protection. Before that filing was announced, a WeWork spokesperson told CoStar News in an email when asked about the removal of those listings: “We have begun a process of engagement with our landlords to permanently fix inflexible and high cost structures in our lease portfolio. WeWork will remain a global flex space leader and this is a critical step in creating a sustainable capital structure and positioning the company, our landlords, and members for long-term success.”
The spokesperson, declining to comment on specific negotiations and locations, said its flexible office spaces being taken off its website doesn’t mean WeWork no longer has a lease or operates there.
The pruning of the locations from its website comes as WeWork last week said its lenders, including majority shareholder SoftBank, gave it a seven-day extension after the company missed interest payments to prevent a default. That, coupled with a Wall Street Journal report saying the company may file for bankruptcy as early as this week, preceded its share price falling below $1 even after it two months ago completed a 1-for-40 reverse stock split to prevent it from being delisted. WeWork’s stock was halted for trading on Monday pending news, according to the New York Stock Exchange.
WeWork has said rent expenses, which represented 74% of its second-quarter revenue and two-thirds of its operating expenses, are the key obstacle to achieving profitability.
Other Locations Removed
The United States locations that have been removed from WeWork’s website, besides its home market of New York, also include San Francisco, Irvine, Oakland, Los Angeles, West Hollywood, Santa Monica and Beverly Hills in California; Boston; Philadelphia; Atlanta; Phoenix; Bellevue and Seattle in Washington; and Nashville, Tennessee.
Based on the data, none of the locations so far were removed in cities such as Miami, where WeWork said in the past it has performed well.
Among the locations that have disappeared from its website are some of the iconic addresses such as 9830 Wilshire Blvd. in Beverly Hills, California, which CoStar data shows WeWork in 2019 signed a lease spanning 73,000 square feet. WeWork said in a blog post in May 2021 that it felt “an enormous architectural and design responsibility” in redesigning the I.M. Pei–designed space that was the longtime home of the famed Creative Artists Agency.
The addresses that have been removed also showcase WeWork trimming from where it has had a cluster of locations in some neighborhoods. For instance, in Manhattan’s SoHo neighborhood, 525 Broadway, where CoStar data shows WeWork signed for about 30,000 square feet in June 2019, was taken down. But WeWork still lists 524 Broadway right nearby, where CoStar data shows the firm has a 75,000-square-foot lease.
That the United States would shoulder the brunt of the locations being removed isn’t surprising. Globally, WeWork has removed at least 52 locations since Aug. 20, according to CoStar.
WeWork said in August that occupancy rates in the United States and Canada remained “sluggish” and dropped to 67% in the second quarter from 69% in the first quarter, trailing other regions where it operates by well over 10 percentage points and where margins are stronger, Chief Executive David Tolley said on a call with Wall Street analysts at the time.
The sites being removed represent about 20% of WeWork’s more than 230 United States locations, but they are a third of the locations each in New York, San Francisco and Seattle, according to Phil Mobley, CoStar’s national director of office analytics for the United States.
"It's simply about their exposure in those [three] markets," Mobley said. San Francisco and Seattle "definitely have suffered because of exposure to tech workers. [New York City] doesn't have as high a concentration of tech workers. But WeWork has its largest presence there."
In a telling sign of the flight to quality trend, Mobley said among the sites being removed, 60% are in lower-tier Class B buildings, followed by 34% in "commodity" Class A buildings and 6% in top-tier trophy towers.
“The Class Bs would likely be at a lower price point and would need more users to generate the same revenue,” Mobley said. “On the other hand, the trophy and Class A [locations] would have higher lease costs for WeWork. So, by keeping more of them open, they are banking on users being drawn to those higher-quality locations. With the Class B [removal] … they're trying to maximize the competitive quality of their locations.”
Here’s a list of the United States sites that have been removed from WeWork’s website since Aug. 20:
- 10 E. 38th St., New York
- 100 Summer St., Boston
- 1000 N. Hancock St., Philadelphia
- 101 N. First Ave. Phoenix
- 10885 NE Fourth St., Bellevue, Washington
- 1156 Avenue of the Americas, New York
- 130 Madison Ave., New York
- 1389 Peachtree St. NE, Atlanta
- 1410 Broadway, New York
- 1430 Walnut St., Philadelphia
- 1455 Market St., San Francisco
- 166 Geary St., San Francisco
- 181 Madison Ave., New York
- 1814 Franklin St., Oakland, California
- 185 Madison Ave., New York
- 18565 Jamboree Road, Irvine, California
- 205 Hudson St., New York
- 229 W. 36th St. New York
- 255 Greenwich St., New York
- 28 W. 44th St., New York
- 315 W. 36th St., New York
- 35 E. 21st St., New York
- 385 Fifth Ave., New York
- 40 Water St., Boston
- 419 Park Ave. S, New York
- 44 Wall St., New York
- 475 Sansome St., San Francisco
- 500 11th Ave. N, Nashville, Tennessee
- 500 Bellevue Way NE, Bellevue, Washington
- 500 Yale Ave. N, Seattle
- 505 Park Ave., New York
- 525 Broadway, New York
- 550 Kearny St., San Francisco
- 57 E. 11th St. New York
- 5760 W. Jefferson Blvd., Los Angeles
- 6 E. 32nd St., New York
- 620 Avenue of the Americas, New York
- 7 W. 18th St., New York
- 75 Arlington St. Boston
- 8 W 40th St., New York
- 808 Wilshire Blvd., Santa Monica, California
- 8687 Melrose Ave., West Hollywood, California
- 920 Fifth Ave., Seattle
- 980 Avenue of the Americas, New York
- 9830 Wilshire Blvd., Beverly Hills, California