WeWork plans to ditch almost 70 North American leases
WeWork wants to walk away from 69 leases across the US and Canada as part of the co-working company’s bankruptcy process, including 40 in New York alone.
Bankruptcy filings lodged this week in New Jersey include a list of unexpired office and storage leases, including subleases, in cities across North America. Landlords include Hudson Pacific Properties, Broadway Realty and, on a sublease on New York’s Madison Avenue, Santander.
New York accounts for by far the largest number, with multiple leases also earmarked for “rejection” in Los Angeles, San Francisco, Vancouver and Toronto.
WeWork wants to walk away from 69 leases across the US and Canada as part of the co-working company’s bankruptcy process, including 40 in New York alone.
Bankruptcy filings lodged this week in New Jersey include a list of unexpired office and storage leases, including subleases, in cities across North America. Landlords include Hudson Pacific Properties, Broadway Realty and, on a sublease on New York’s Madison Avenue, Santander.
New York accounts for by far the largest number, with multiple leases also earmarked for “rejection” in Los Angeles, San Francisco, Vancouver and Toronto.
WeWork said in its bankruptcy announcement that it was “requesting the ability to reject the leases of certain locations, which are largely non-operational and all affected members have received advanced notice”.
In its separate application, the company said its “meticulous, well-considered lease rejection plan is centred on value maximisation”.
“The debtors’ [WeWork and its subsidiaries] lease portfolio has been, and continues to be, a significant contributing factor to their current financial challenges,” the document said. “The rejection of the leases is critical for the debtors to administer their estates efficiently during the pendency of these Chapter 11 cases.”
It added: “The debtors have concluded that the cost of maintaining the leases outweighs any revenues that such locations or premises currently generate or that they are likely to generate in the near future. Absent rejection, the debtors believe that the leases will continue to burden the debtors’ estates with substantial administrative expenses at a critical time when the debtors are making concerted efforts to maximise liquidity and preserve the debtors’ estates.
“Rejecting the leases will help ease the debtors’ cash burn and increase the debtors’ liquidity.”
WeWork added that it will abandon “personal property” at the sites such as furniture, fixtures and equipment.
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Photo from WeWork
