WeWork Strikes Deal To Shrink Location At Carr Properties' Bethesda Tower
WeWork has reached a second agreement in its effort to restructure hundreds of leases worldwide as it moves through bankruptcy proceedings.
The coworking giant has renegotiated its lease at Carr Properties’ 23-story The Wilson building in Bethesda for less space and cheaper rent, it said in a new court filing Friday.
The space initially comprised 60K SF across three floors when it opened in June 2022, but it is now being reduced to two floors, a WeWork spokesperson told Bisnow. The spokesperson declined to provide more details on the rent price.
“We are excited to continue providing an exceptional experience to our members at The Wilson and to all seeking turnkey, flexible workspace in Bethesda,” the spokesperson said in an emailed statement. “Washington D.C. and the greater DMV region continues to be an important market for WeWork and we look forward to continuing to invest in our buildings and offerings there well into the future.”
Carr Properties didn't respond to Bisnow's request for comment.
The Wilson is a 23-story office tower with ground-floor retail. Carr delivered the building in 2021 alongside two residential towers branded as The Elm. The total mixed-use development amounts to 1.3M SF near the Bethesda Metro station.
The renegotiation is one more step toward the 400 leases WeWork is hoping to restructure and the more than $500M in annual rent payments it hopes to save after filing for Chapter 11 bankruptcy protection in November.
Attorneys for WeWork’s unsecured landlords have claimed the coworking giant’s restructuring team has been “opaque and antagonistic” during its lease negotiations, Bisnow reported last month. But the committee of unsecured creditors consented to an amended plan that a judge approved last month.
Carr Properties was named among WeWork’s largest unsecured creditors in its bankruptcy filing. It owed the D.C.-based developer $3.6M as of November. In addition to The Wilson, Carr Properties is WeWork’s landlord at the 865K SF Midtown Center downtown.
WeWork completed its first lease renegotiation during bankruptcy in December at 1440 Broadway in Manhattan. The company secured reduced rent and a shortened lease term for its 300K SF at the building, two-thirds of which is occupied by Amazon.
Before filing for bankruptcy, WeWork renegotiated or exited 590 of its leases. It has been approved to exit 67 leases as part of its bankruptcy proceedings, and it has asked a federal judge to approve its exit of 14 more. WeWork closed several D.C.-area coworking spaces before the bankruptcy filing, but none of the newly exited leases have been in the region.
