DivcoWest Sues WeWork For $30M After Beleaguered Firm Abandoned Coworking Location
DivcoWest is suing WeWork for $30M after the coworking company left space it leased at a DivcoWest building in Manhattan and quit paying rent in December, The Real Deal reports.
The California-based landlord contends that WeWork owes it all of the rent due under the lease at 311 West 43rd St., which ran through 2032. The lawsuit alleges that WeWork didn't send notice that it was leaving and didn't remove its property from its 64K SF.
WeWork did not immediately respond to a request for comment Monday.
Earlier this month, WeWork said that it will renegotiate nearly all of its leases and that it would leave "unfit and underperforming locations." The company's lease liabilities represent more than two-thirds of its total operating expenses.
The move to renegotiate came after WeWork said in a quarterly earnings release in August that it had “substantial doubt” about its ability to stay in business. The company cited its losses, projected cash needs, increased member churn and an anemic office market.
WeWork incurred a net loss of $397M in the second quarter, up from a loss of $299M in Q1 — though the second-quarter loss represented an improvement from Q2 2022, when it reported a net loss of $635M.
WeWork has also assembled a team of restructuring experts, reportedly to avoid bankruptcy, including real estate adviser Hilco Global, consultant Alvarez & Marsal and law firm Kirkland & Ellis.
