CoStar Asks Court to Reject WeWork’s Virginia Lease Review Extension
By Nick Trombola April 22, 2024 3:22 pm
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CoStar Group wants WeWork (WE) to make up its mind regarding a lease agreement between the two companies in Virginia and asked a court to reject WeWork’s request for more time to review the contract, according to the Washington Business Journal.
The commercial real estate data giant became an official WeWork landlord earlier this year after it purchased a 552,000-square-foot office tower at 1201 Wilson Avenue in Rosslyn, Va., where the spiraling coworking company was also a tenant.
WeWork had a 120-day period to review its preexisting lease in the wake of CoStar’s purchase, though WeWork filed a motion on March 4, one day before that period ended, to further extend that deadline by 50 days.
CoStar hit back with a counter-motion on April 18, after a hearing on WeWork’s extension request was postponed until this coming Wednesday, arguing that it was unfair and WeWork has a “nebulous exit strategy” for the property, according to the Business Journal.
The landlord also claimed that WeWork violated bankruptcy rules by not paying rent for its 83,000-square-foot office after filing for Chapter 11 last November. Though the Business Journal reported that WeWork has since paid all of its back rent on 1201 Wilson.
Still, WeWork has sought rent reduction and other concessions for its lease from CoStar, as it continues renegotiating or exiting many of its leases worldwide in the wake of its bankruptcy. CoStar has refused any contract changes, though cannot ultimately terminate the deal with the coworking company until its bankruptcy situation is resolved, according to the Business Journal.
Aside from CoStar’s filing, lawyers for WeWork have been particularly busy lately. Just a day after CoStar filed its motion, a group of WeWork’s unsecured creditors filed a separate motion asking a court to force the company to negotiate with potential buyers, arguing that infighting among its managers and senior lenders has derailed its revitalization efforts.
“WeWork has made significant progress in our financial restructuring and global lease negotiation efforts, and we have a clear line of sight into emerging from Chapter 11 as a strong and sustainable company in the coming weeks,” a spokesperson for WeWork told Commercial Observer via email. “We intend to continue using the tools available throughout this process to ensure that the company’s go-forward footprint supports profitability, while continuing to deliver a best-in-class member experience for the long-term.”
A spokesperson for CoStar did not immediately respond to a request for comment.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
