What To Do If Your Coworking Tenant Pulls Out: How A Birmingham Office Block Rethinks Post-WeWork
With coworking operators struggling to survive until the UK economy reopens this summer, and WeWork raising doubts about its own long-term liquidity, many landlords may have to confront the prospect of life after their coworking tenants have pulled out.
A lesson in how to cope comes from Birmingham, where WeWork’s decision to abandon plans for an 81K SF hub at Louisa Ryland House left the landlord Euro Properties Investments with a problem. After a pause to think, it is now pressing on with the lavish refurbishment.
The lesson seems to be: Carry on regardless.
Euro Properties Investment has instructed CBRE and JLL’s office agency teams to market the 86K SF building, now in the midst of building works. Once bitten, twice shy, Euro said there will be ”an element of flexible office accommodation” for traditional occupiers alongside startup and scale-up businesses. There is no word on the name of the operator, or whether the landlord will manage it in-house. Both are likely to depend on the rate of take-up for traditional office space, letting agents said.
The newly refurbished space will provide grade-A office accommodation over six floors, with floorplates ranging in size from 3.7K SF to 15K SF. The quoting rent is £31.50/SF.
On-site tenant amenities include a roof terrace, external courtyard, café, showers and changing rooms, and cycle facilities. Publicity images show encouraging images of bread-making.
The WeWork hub at Louisa Ryland House was in doubt almost from the start. A deal was agreed with landlord Euro Property Investments Limited in June 2019, amidst expectations that it would be open for business in spring 2020. Yet by December 2019 WeWork’s global woes, and slow progress on its other Birmingham hubs, meant doubts were being raised about this building’s timetable.
A second target date of Q4 2020 was overtaken by WeWork’s UK regional rethink that saw it close or abandon plans for all but one Birmingham outlet, a 55K SF hub at 55 Colmore Row.
Louisa Ryland House has been the subject of a number of redevelopment proposals over several years, none so far brought to a conclusion.
“The mix of flexible floorplates, which can be reconfigured to suit different size requirements, and the potential to split the space to provide a separate self-contained office with its own access, means Louisa Ryland House will appeal to a range of occupiers,” JLL director Jonathan Carmalt said.
Joint agents are JLL and CBRE.
Last week WeWork insisted its near-term liquidity was not in doubt but admitted concerns over its long-term future. The pandemic has severely damaged a business model and management approach that looked doubtful even before the coronavirus was discovered.
“The extent to which Covid-19 could continue to impact WeWork’s global business and its operations in the UK depends on future developments which are uncertain, cannot be predicted and are outside our control,” City A.M. reported WeWork as having said.
