WeWork Seeks To Reject Even More Leases As Bankruptcy Proceedings Trudge On

WeWork is looking to say goodbye to eight more leases as bankruptcy proceedings for the embattled coworking giant move forward.

WeWork has asked the federal judge overseeing its restructuring to reject the leases, which span six locations across Dallas, Toronto, Atlanta and San Francisco, according to a motion filed Dec. 29. The request, if approved, would bring the total number of leases WeWork cut in bankruptcy to 81. 

A WeWork spokesperson said all six of the locations in the motion are no longer operational, and its members have either been relocated or have had their contracts transferred to the buildings' owners. 

"We continue to proactively engage with our real estate partners to better align our long-term financial interests and find mutually beneficial lease agreements," the spokesperson told Bisnow in an emailed statement. "We plan to stay in the vast majority of markets as we move into the future and we always work to minimize our member impact through our ongoing optimization efforts."

Four of the leases WeWork is looking to reject were ones it took over when it bought Common Desk, a Dallas-based coworking company, in January 2022. Three of those leases combine for a single location, at 2919 Commerce St. in Dallas' Deep Ellum neighborhood, which was Common Desk's first location and its flagship, according to its website. The Common Desk at 633 W. Davis St. in Dallas is also part of the latest bankruptcy filing.

The other locations shutting down include two Toronto spaces: a lease at 48 Yonge St. and a management contract with Hudson's Bay Co. at the department store chain's Queen Street flagship. It is also rejecting leases at 71 Stevenson St. in San Francisco and its 39K SF at The Interlock development in Atlanta, a location it opened in November 2022. 

A spokesperson for Armada Hoffler Properties, which owns The Interlock, declined to comment. Owners of the other properties couldn't be reached for comment. 

This is the third batch of leases WeWork has proposed to walk away from since filing for bankruptcy on Nov. 6. As part of its initial filing, it moved to reject 69 leases, 40 of which were in New York. It later removed two that expired before filing, and U.S. Bankruptcy Judge John Sherwood for the District of New Jersey approved the rejection of the other 67. 

The same week, WeWork filed to add six leases to the rejection heap — four in New York, one in Boston and one in Dallas at 1623 N. Hall St. That motion has yet to be approved.

WeWork had 509 global locations as of Oct. 12, including 292 locations in the U.S. and Canada. It signaled in an earlier bankruptcy filing that it could walk away from as many as 163 locations. 

WeWork hopes to cut its annual rent payments by $500M and negotiate terms at 400 locations, lease talks that are critical to its future. Some negotiations are going better than others. The company struck a deal to reduce its rent at a 300K SF location on Broadway in Midtown Manhattan last month. 

But attorneys for the official committee of unsecured creditors formed for the restructuring process wrote in a court filing that WeWork's landlords have reported that "the tone and structure of the lease negotiation process has been opaque and antagonistic, which will not lead to a fruitful outcome."

WeWork has said in court filings it hopes to emerge from bankruptcy in March, although it could run out of cash before then. 

Ethan Rothstein contributed reporting for this article.