WeWork Negotiates to Keep 71 Fifth Ave. and Dock 72 Locations But Awaits Court OK
By Mark Hallum January 30, 2024 4:17 pm
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WeWork/" title="WeWork" class="company-link">WeWork (WE) is maintaining its foothold in two New York City buildings, and three others throughout the U.S., after its November Chapter 11 filing.
The coworking pioneer has managed to retain Madison Capital" class="company-link">Madison Capital’s 71 Fifth Avenue just west of Union Square as well as its Dock 72 headquarters in the Brooklyn Navy Yard, according to WeWork, which will need bankruptcy court approval to finalize the deals.
The Union Square location spans 73,000 square feet with WeWork negotiating for reduced rent, a shorter term and smaller digs, according to WeWork. WeWork originally signed a 45,000-square-foot lease in the building in June 2018, The Real Deal reported.
WeWork did not confirm what the square footage of 71 Fifth Avenue will be after the renegotiation and its unclear when it expanded to 73,000 square feet.
WeWork also leases 200,000 square feet at BXP and Rudin’s Dock 72 in the Brooklyn Navy Yard for its headquarters. It will hold onto this space under a new deal with reduced rent, a shortened term and without “lease security,” but it’s unclear if WeWork’s footprint will remain the same size.
Dock 72 opened in 2019 with WeWork as its first occupant with 220,000 square feet, which it reduced in November 2022 to an unspecified amount.
WeWork has stopped paying rent at Dock 72 since it filed for bankruptcy in November and it won’t have to repay the back rent under the new deal, TRD reported. However, Madison’s is set to get more than $600,000 in unpaid rent from WeWork as part of its negotiations, according to TRD.
But now, WeWork is confident that it will not only hold onto the two New York City locations, but it may also get to keep one in Columbus, Ohio, one in Tempe, Ariz., and another in Arlington, Va.
“Union Square remains a sought-after location for growing companies, and we’ve received positive feedback from members about the building throughout our tenancy. New York City remains one of WeWork’s key markets,” Melissa Visoky, director of real estate management at WeWork, said in a statement.
As its restructuring continues, WeWork said it will assess the viability of other locations that perform well while continuing to leave others behind.
WeWork recommitting to the spaces comes after it canceled 40 of its New York City leases at the start of its bankruptcy proceedings and owes landlords $98.6 million in back rent.
Court drama continues for WeWork after landlords of six buildings throughout the country filed a lawsuit last week claiming that the tenant was withholding $33 million in rent that was due Jan. 1 as a negotiating tactic.
Of all the leases it planned to cancel nationally, about $1.85 billion in commercial mortgage-backed securities loans were exposed to WeWork’s distress.
Mark Hallum can be reached at mhallum@commercialobserver.com.
