WeWork Discloses It Will Keep Another 89 Leases

As it prepares to exit bankruptcy, WeWork has disclosed that it will assume another 89 leases in the U.S. and Canada, including most of its leases in Los Angeles and Orange County.

The company said in a statement it has now determined a path forward at more than 97% of its lease portfolio.

WeWork, which had previously announced the assumption of 77 leases, said it expects to emerge from bankruptcy operating more than 170 locations across the U.S. and Canada and a total of 377 locations globally. WeWork’s restructuring is projected to reduce its total rent commitments by more than $11B.

“Strengthening our real estate portfolio could not have been possible without the collaboration of our landlord partners, to whom we are immensely grateful,” WeWork’s global head of Real Estate Peter Greenspan said in a statement. “Their partnership, combined with our improved operational efficiency and unwavering commitment to our members, sets the stage for WeWork’s success in this new chapter.”

WeWork’s latest filing adds another 10 leases it will be assuming in Los Angeles and Orange counties, including locations in El Segundo, Playa Vista, Pasadena, Glendale, Newport Beach, Santa Monica and Irvine. WeWork has previously filed motions to keep leases at buildings in North Hollywood, Downtown Los Angeles, West Hollywood, Long Beach and South Coast Plaza.

In February, the company filed a motion to reject a 92K SF lease at the Gas Company Tower in Downtown Los Angeles, a building that is in receivership.

The assumptions include 18 locations in New York but not a lease encompassing 20 floors in Tower 49 in Midtown Manhattan—including WeWork’s corporate headquarters and coworking space for 2,800 WeWork members.

The company notified the court that it will end its operations at Tower 49 on May 31 after unsuccessful negotiations to restructure a 300K SF lease in the building, which is located at 12 East 49th Street.

WeWork has been a tenant in Tower 49 since July 2016, when it entered a lease for 10 floors encompassing 159K SF in the building, which is owned by Kato International. WeWork said in a statement it is reaching out to members impacted by the closure in an effort to relocate them to other WeWork locations.

WeWork received court approval for a deal with stakeholders for $450M in debt financing that will enable the company to emerge from bankruptcy. The deal is providing up to $50M to support the company until it emerges from bankruptcy and $400M in post-petition funding.

The “debtor-in-possession” loans are secured by liens that adjust the ownership equity stakes in WeWork, according to the company’s disclosure statement.

Operating under the name Cupar Grimmand, WeWork’s workplace management software partner Yardi is the new majority owner of WeWork, providing about $338M of the new financing and having a 60% stake after the company emerges from bankruptcy, according to the filing.