WeWork Files Motion To Keep First Chicago Lease, Strikes Agreement On 4 Others
Beleaguered coworking titan WeWork plans to assume its first Chicago lease, along with lease assumptions in four other cities, the company announced Monday.
The company aims to keep its lease at 448 N. LaSalle St., one of its nine Chicago locations. The move, which is pending court approval, is part of WeWork's efforts to restructure its real estate portfolio as it navigates bankruptcy proceedings.
WeWork reached an agreement to reduce the term, rent and square footage in its revised Chicago lease, according to court documents. The lease will also convert to a gross lease, and the company reduced its guarantee. WeWork also agreed to pay $827K at a later date.
The coworking company will also assume leases at 77 Sands St. in New York City, 1448 NW Market St. in Seattle, 600 California St. in San Francisco and 2201 Broadway in Oakland.
WeWork has assumed or rejected about half of its 292 North American leases and still needs make decisions on roughly 150 locations it had heading into bankruptcy, Bisnow reported last week. A WeWork spokesperson said there was “nothing additional to share” about the fate of the company's other eight Chicago locations.
The company's initial bankruptcy filings in November showed that WeWork owes three Chicago firms a total $17.1M. Wilmette-based The Alter Group is due roughly $11.9M in “lease fees and related litigation,” slotting it in second behind New York-based U.S. Trust Co. on WeWork's list of creditors with the largest unsecured claims.
Chicago-based Omni Group also appeared on that list, due $2.7M in accrued unpaid rent, as is Cushman & Wakefield, which is owed $2.5M in what the filing describes as “trade payable.”
To date, WeWork has slashed its rent commitments by over $8B and has made decisions on over 90% of its global locations, according to a press release.
“Today’s assumptions highlight our commitment to maintaining a strong presence in economic hubs across the country,” Peter Greenspan, global head of real estate at WeWork, said in the release. “We appreciate our landlords’ commitment to reaching constructive solutions and together, we have a clear picture of WeWork’s next chapter.”
