The Real Deal New York

Durst snubs WeWork, says there are better offers for 1 WTC space

The deal would have made WeWork the biggest office tenant in Manhattan
September 05, 2018 01:45PM

WeWork’s Adam Neumann, One World Trade Center at 285 Fulton Street, and Douglas Durst (Credit: Getty Images and World Trade Center)

WeWork isn’t coming to the World Trade Center after all.

The co-working company’s bid to lease up to 12 floors at One World Trade Center has fallen apart after the Durst Organization received better offers for some of the space WeWork wanted, according to the Wall Street Journal. WeWork had hoped to lease roughly 220,000 square feet at the tower.

Negotiations between WeWork and Durst ran into multiple issues, although both sides had been making progress before the deal fell through. Servcorp, a tenant at One World Trade Center with similar co-working options to WeWork, had a clause in its lease restricting its competitors from occupying the building, but the Durst Organization was discussing a way to get around this.

Security concerns also came up, as WeWork officials were concerned that the strict measures in place at One World Trade Center would make life difficult for WeWork members from different locations who pay to have access to multiple buildings.

WeWork’s lease at One World Trade Center would have made it the largest private occupier of Manhattan office space. It is still likely to achieve this position by the end of the year despite the recent setback.

The company inked multiple leases last month, including 25,000 square feet at 609 Greenwich Street in the West Village, about 70,000 square feet at 880 Third Avenue in the Plaza District, and 258,344 square feet at 21 Penn Plaza in Midtown.

Meanwhile, a recent report from Cushman & Wakefield found that investors apply a discount when pricing office properties with high exposures to co-working occupancies.

A spokesman told the journal that WeWork was not giving up on the World Trade Center yet.

“We have, and continue to, explore opportunities to secure a location there and believe we will be an energizing force for the building,” he said. [WSJ] – Eddie Small