WeWork cancels six leases in LA, OC — but 15 locations still in flux

UPDATED, Nov. 10, 2023, 11:21 a.m.: Southern California is not immune from the fallout of WeWork’s bankruptcy. 

The New York-based co-working company has canceled leases at six office buildings — five in Los Angeles County and one in Orange County — in connection with its Chapter 11 bankruptcy filing earlier this week, according to court filings. 

“As part of today’s filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational, and all affected members have received advanced notice,” the company said in a statement to The New York Times on Monday. 

The firm still lists 19 spaces across L.A. and Orange County to members, according to its website and booking app. 

WeWork is immediately nixing unexpired leases at the following locations: 

Pacific Design Center | 8687 Melrose Avenue | West Hollywood

WeWork will be vacating its 55,000-square-foot lease at the Green Building at the Pacific Design Center, one out of three buildings at the colorful complex in West Hollywood. The lease was set to expire in 2033, according to a Trepp report.

However, WeWork is keeping a 70,000-square-foot lease at the Red Building and is still operating a location there, according to a WeWork spokesperson. That lease is set to expire in 2030, according to Trepp.

The Pacific Design Center is owned by Charles Cohen’s Cohen Realty Brothers. Cohen bought the property for $165 million in 1999, and added the 420,000-square-foot Red Building in 2012. 

Cohen recently refinanced the property with a $265 million debt package from Goldman Sachs, according to property records. About two-thirds of the loan deal was securitized across four commercial mortgage-backed securities pools, according to data from Morningstar. 

WeWork was the Pacific Design Center’s second-largest tenant, behind Cedars Sinai, meaning a lease exit is undoubtedly set to hurt the property’s financials. 

8305 Sunset Boulevard | West Hollywood

WeWork had leased almost all of the 12,000-square-foot property for its “headquarters by WeWork” platform in 2019. However, the site was shut earlier this year. 

The property is owned by Venice Investments, a real estate investment and development firm run by Joseph and Yahuda Emrani. The firm has owned the site since at least 2007, records show. No loan on the property has been recorded with the county since 2018, when a loan with Wilshire Bank and Bank of Hope matured. 

1453 3rd Street Promenade | Santa Monica 

WeWorkalso leased this site for its “headquarters by WeWork” platform, but eventually converted it into a standard WeWork. The space is still available to book through WeWork’s website — starting at $29 per day. It’s unclear how much space WeWork leased at the property.

Beverly Hills-based Maxxam Enterprises bought the 131,500-square-foot building in 2003 for $35.5 million, records show. OpenStreet Capital also owns a stake in the property, records show. In 2016, the firm refinanced the property with a $90 million CMBS deal, which matures in 2025.

Maxxam and OpenStreet are paying 4.53 percent in interest on the debt, which is broken up into two CMBS pools, according to Morningstar. 

808 Wilshire Boulevard | Santa Monica

WeWork leased space at the 82,000-square-foot building in Santa Monica in 2019, records show. Douglas Emmett has owned the property for more than 20 years. 

Almost 75 percent of the building is currently available for lease, a LoopNet listing shows. WeWork does not list 808 Wilshire as a current location, according to its website. 

3000 South Robertson Boulevard | Los Angeles

Pendulum Property Partners, which owns the 107,000-square-foot building near Culver City, has owned the asset for just about two years, records show. The firm paid about $56 million for the office building in November 2021. 

The four-story building was a “fully privatized WeWork buildout,” according to a CBRE listing for the property. 

Lakeshore Towers | 18191 Von Karman Avenue | Irvine 

WeWork immediately canceled this lease in Orange County, totaling roughly 75,000 square feet. The company shuttered the location at Lakeshore Towers. Its lease was set to run through 2034. 

A month after WeWork shuttered the space, the property’s owner, State Street, became delinquent on $81 million in loans tied to the 880,000-square-foot building. 

The Boston-based investment manager holds two loans on the 893,000-square-foot complex at 18101 Von Karman Avenue — one for $45 million and the other for $36 million — that are in default, according to data from Trepp. Both loans were originated by Starwood Property Trust and then packaged into commercial mortgage-backed securities deals and sold to investors.

This story has been updated to correct that WeWork will only be exiting the Green Building at the Pacific Design Center, not both the Red and Green Buildings.