WeWork tells members you must pay rent

Office-space provider sent hundreds of letters to members unable to pay and has threatened some with debt collection, according to a report

National /
Oct.October 28, 2020 07:15 PM
WeWork CEO Sandeep Mathrani (Wikimedia)

WeWork CEO Sandeep Mathrani (Wikimedia)

WeWork has doubled down on its demand for rent from members unable to pay, in some cases threatening debt collection if clients don’t fork over the money.

Covid-related eviction moratoriums in many cities, including New York, have been extended, offering some relief to commercial and residential tenants. But WeWork has memberships, not leases so it doesn’t have to abide by those moratoriums.

The office-space provider is now taking a tougher stand with members unable to pay rent, according to Business Insider. It sent hundreds of letters from in-house lawyers to members in the U.S. and Canada, demanding rent, according to the report. About 100 letters were sent from outside attorneys to members with higher outstanding balances.

The move comes as WeWork’s credit rating was further downgraded on concerns that the pandemic could seriously weaken demand for office space. Fitch dropped WeWork’s long-term issuer default rating last week one notch from CCC+ to CCC. Both are non-investment grades, otherwise known as junk or high-yield status, representing a real possibility that the company will default on its credit obligations.

Earlier in the pandemic, WeWork took a softer approach toward rent issues. But that was only after the company faced backlash for working out its own rent breaks with landlords but refusing to extend the same concessions to members. WeWork allowed memberships to remain intact through the spring, and offered relief in the form of payment plans and rent discounts.

But the situation didn’t improve, and WeWork lost 81,000 members in the second quarter, according to the report.

A WeWork spokesperson declined to comment. [BI] — Raji Pandya


Related Articles

arrow_forward_ios
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
WeWork CEO Adam Neumann (Credit: Getty Images and iStock)

WeWork’s side businesses are fizzling

WeWork’s side businesses are fizzling
Sarah Pontius (Credit: Union College)

Another head rolls at WeWork

Another head rolls at WeWork
258 8th Avenue (Google, Target)

Target planning yet another NYC store in Chelsea

Target planning yet another NYC store in Chelsea
Churchill Real Estate's Justin Ehrlich and 381 Broadway (Google Maps)

Two-year Tribeca foreclosure saga continues with lawsuit over $20M

Two-year Tribeca foreclosure saga continues with lawsuit over $20M
Adam America's Omri Sachs and Dvir Cohen with 2503-2509 Broadway (Google Maps; Adam America)

Adam America secures $63M in financing for Upper West Side project

Adam America secures $63M in financing for Upper West Side project
Convene CEO Ryan Simonetti (Convene)

Convene closes Manhattan locations as corporate events fail to return

Convene closes Manhattan locations as corporate events fail to return
New York City District Council of Carpenters’s Monitor Glen McGorty (iStock; LinkedIn)

NYC carpenters union changes how it roots out mob ties

NYC carpenters union changes how it roots out mob ties
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...