WeWork Files Motion to Keep L.A. Lease
By Nick Trombola March 19, 2024 1:06 pm
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Despite the roller coaster ride of 2023, WeWork (WE) isn’t ready to disappear.
The beleaguered coworking company announced Tuesday that it had filed a motion to assume its lease at Constellation Place, at 10250 Constellation Boulevard in Los Angeles’ Century City district, as part of its broader decision to continue operating in L.A., albeit at a far smaller scale.
The lease assumption, which is subject to court approval, is one of seven other assumptions requested by the company across the U.S. and Canada. The filings reveal some signs of life for WeWork, spurred by financial reorganization and landlord negotiations following its Chapter 11 bankruptcy filing in November.
In Chapter 11 proceedings, debtors move to assume a lease when they wish to retain it. Before that is allowed, the debtor must typically assure a judge that it will obey the lease terms and erase or cure any losses suffered by the landlord.
“With this new agreement, we’re excited to be continuing our operations at Constellation Place and solidifying our presence in Los Angeles,” said Peter Greenspan, WeWork’s global head of real estate, in a statement. “We’re steadily approaching a portfolio of locations poised for long-term success and look forward to continuing this momentum.”
Yet that momentum has been hard won. In 2023 alone, WeWork vacated roughly 3 million square feet of space. Of that, some 900,000 square feet has since been backfilled, mostly by competitors such as Industrious, Studio by Tishman Speyer and International Workspace Group, as Commercial Observer previously reported.
Despite the assumption filings announced Tuesday, WeWork has rejected 80 of its leases across the globe throughout its bankruptcy, including 92,000 square feet at the Gas Company Tower in Downtown L.A., and also sought to ditch more than a dozen other leases in Southern California. The company has also reportedly had a hard time paying millions of dollars it owes in back rent.
Meanwhile, at Constellation Place, WeWork offered roughly 87,000 square feet for rent at the 35-story tower in Century City, according to a leasing brochure for the space. Workspaces and meeting room bookings for the property are still listed on the company’s website.
Nick Trombola can be reached at NTrombola@commercialobserver.com.
