WeWork’s recent troubles were largely out of sight and out of mind at the launch event for a massive office project at the Brooklyn Navy Yard.
The completion of Rudin Management and Boston Properties’ Dock 72, a 16-story, 675,000-square-foot project, marks Brooklyn’s first ground-up commercial development in more than a decade. WeWork — whose CEO Adam Neumann stepped down amid the startup’s botched initial public offering — is anchoring the development, with 222,000 square feet of office space.
“You may have heard we’ve been in the news lately, not all of it that flattering,” Sebastian Gunningham, WeWork’s new co-CEO, said to an audience at Tuesday’s event. “So it’s great to be among friends and with this beautiful building behind us.”
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But after the brief nod to WeWork’s failed IPO and financial woes, he quickly changed the subject, focusing the rest of his comments on Dock 72 itself and how proud he was of the project.
“It is an honor to come together with our partners to invest in an area that was historically home to the ship building industry and to transform it into a beautiful space that can facilitate the next wave of innovation in this great city,” he said. “Dock 72 epitomizes all that we are capable of.”
Gunningham left quickly after the event ended and refused to take questions from the press.
Bill Rudin, CEO and co-chair of Rudin Management, said that WeWork had been a solid partner on the project, and he was not concerned that their recent struggles would damage Dock 72 in the long run.
“I’m highly confident that the WeWork team will figure out their short-term issues, and they’ve been great to work with,” he said.
“They’re working on restructuring,” he continued, “and I think, hopefully, they’ll get done in short order, and then they can move on to focusing on their business.”
Interest in Dock 72 among other tenants has picked up now that the building is officially open and more accessible thanks to a new NYC Ferry stop, according to Rudin. He cited media, fintech and advertising companies as some of the specific businesses they are targeting and said rents generally go for between $50 and $60 per square foot. The average office rent in Brooklyn is about $43 per square foot, according to CBRE.
Boston Properties and Rudin Management inked a 99-year ground lease for the property from the Brooklyn Navy Yard Development Corporation for $47 million in June 2015 and filed plans for the project that November, with WeWork set to serve as the anchor tenant.
Things at the co-working company have taken a chaotic turn since then, especially in recent months as executives tried to prepare for an IPO. Gunningham and Artie Minson took over after the disastrous IPO process ultimately led to co-founder Neumann’s departure. The new co-CEOs have since said that they will postpone any IPO plans, and the company may face the prospect of bankruptcy if it does not find a way to raise more capital soon.