WeWork Rejects Three More NYC Leases
WeWork (WE) sought permission to reject nine more leases in a court filing Wednesday — including another three in New York City — the latest twist as the coworking giant’s bankruptcy case winds its way through court in New Jersey.
A spokesperson for WeWork said in a statement that its space in the majority of the nine buildings is “no longer operational.”
“We have previously notified all impacted members and, where possible, relocated members to nearby WeWork offices,” the spokesperson said.
It also includes its 100,000-square-foot location at Walter & Samuels’ 17-story Chelsea office building, which it first signed on for in 2018. The landlord previously sued WeWork in 2021 after it claimed the coworking company defaulted on the lease.
WeWork first partnered with RXR to manage a 90,000-square-foot location inside 75 Rockefeller Plaza in 2019, but RXR isn’t ready to say goodbye to the coworking giant.
RXR claims WeWork owes $795,760 in January rent for its space in the 627,000-square-foot Midtown office tower, and asked the court to step in to force WeWork to pay up since the U.S. bankruptcy code “requires debtors to continue to perform their obligations under their unexpired leases,” RXR wrote in a motion filed Jan. 30.
Lawyers for RXR “reached out numerous times before the filing of this motion in an effort to resolve the matter,” the filing said. “No payment was forthcoming.”
A spokesperson for RXR did not respond to a request for comment.
The other six rejected leases mentioned in Wednesday’s court filing are at buildings in Boston; Los Angeles; Phoenix; Portland, Ore.; Lehi, Utah and The Woodlands, Texas
While RXR has been trying to get WeWork to get up to date on its 75 Rockefeller space, the coworking company and the landlord were able to come to better terms on another Manhattan building.
WeWork handed over the operations of its location at 620 Avenue of the Americas to RXR soon after its November bankruptcy filing, and RXR was quickly able to sign a direct deal with former WeWork tenant Current in the property, as Commercial Observer previously reported.
A spokesperson for WeWork said there have been several dozen other, more amicable cases with landlords as part of the bankruptcy proceedings, with WeWork able to restructure the terms of at least 60 leases so far, saving the coworking company $1.5 billion in rent.
On Tuesday, WeWork unveiled five locations it plans to salvage, including Madison Capital’s 71 Fifth Avenue and its headquarters at the Brooklyn Navy Yard, as Commercial Observer reported.
Other landlords haven’t been so lucky.
WeWork has so far sought to reject 92 leases since it filed its initial Chapter 11 petition in November. The court approved all of them so far, and a decision on the nine additions is pending.
Last week, the owners of six buildings claimed WeWork withheld $33 million in rent that came due on Jan. 1, accusing the coworking company of flouting U.S. bankruptcy code to “strong-arm negotiations with certain landlords,” according to court documents.
The WeWork spokesperson said the company will “continue to work towards solutions that support more profitable operations for WeWork while retaining as many buildings as possible.”
Abigail Nehring can be reached at email@example.com.