One-Third of Vacated WeWork Space Was Leased in 2023
By Mark Hallum March 8, 2024 1:55 pm
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Some landlords across the country are picking up the pieces after WeWork (WE) left voids spanning millions of square feet in office buildings.
Up to one-third of all space left vacant by the coworking giant’s collapse into Chapter 11 have been backfilled by new tenants, equaling 90 office leases out of 157 WeWork locations that closed, according to CoStar data.
How the other two-thirds will fare is not known.
And the companies moving in to fill WeWork’s void have largely been its competitors. Firms such as Industrious, Studio by Tishman Speyer, and International Workspace Group — which runs Regus and Spaces — took over 900,000 square feet from WeWork, CoStar found.
Of about 8.9 million square feet vacated by WeWork, 3 million square feet were leased to a new tenant from 2016 until the present. CoStar recorded that 235,361 square feet of space ditched by WeWork in the first months of 2024 alone is still empty, while 620,888 square feet were reoccupied.
Approximately 3 million square feet were vacated in 2023 alone, after WeWork declared bankruptcy in November, and about 900,000 square feet got backfilled that same year, according to the data.
“WeWork wants to see the entire commercial real estate industry succeed and we’re happy to hear when spaces we’ve formerly operated are re-leased,” a WeWork spokesperson said in a statement.
The prospects for the other two-thirds of landlords are not clear, but the early predictions of industry leaders who observed WeWork’s long fall following its failed initial public offering in 2019 still may not have been too far off.
“In the case of landlords, there are going to be a lot of heads that go through the windshield as that business comes to a screeching stop,” Empire State Realty Trust’s Anthony Malkin told Commercial Observer in October 2023.
When WeWork vacated a space made a big difference in how fast it was backfilled, too.
Only 4,583 square feet out of 433,000 square feet left empty by WeWork was leased to new tenants in 2019, for example, while only about 458,000 out of 2.7 million square feet found a new tenant over the course of 2021.
Since it moved to bankruptcy, WeWork has seen an offer in February from its ousted co-founder Adam Neumann, which doesn’t even seem to have been entertained by the coworking firm.
WeWork has rejected 80 of its leases globally during its bankruptcy process and has been chased down by landlords for back rent in court.
Some of the more sizable leases WeWork has jettisoned include a 92,000-square-foot location at the Gas Company Tower in Los Angeles last month and a 20,253-square-foot location in Downtown Miami, which was taken over by Vast Coworking Group.
Mark Hallum can be reached at mhallum@commercialobserver.com.
