WeWork will hold onto its leases for most of its South Florida co-working spaces, while the future of its South Beach and downtown Miami outposts remains in doubt.
The firm, which filed for Chapter 11 reorganization in November, is working to emerge from bankruptcy by the end of May, most recently filing a plan to keep 89 co-working spaces in the U.S. and Canada.
In South Florida, WeWork will continue to lease its Miami-Dade County outposts at Wynwood Garage at 360 Northwest 27th Street in Miami’s Wynwood neighborhood, and at 78 Southwest Seventh Street in Brickell City Centre in Miami, according to WeWork’s notice submitted in bankruptcy court on Friday. Also, the firm is keeping both of its Coral Gables co-working spaces at 2222 Ponce de Leon Boulevard and at 255 Giralda Avenue in the Giralda Place mixed-use complex.
WeWork’s spaces at Southeast Financial Center at 200 South Biscayne Boulevard in downtown Miami, and at 429 Lenox Avenue in Miami Beach aren’t included in the court filing’s list of assumed leases.
A WeWork spokesperson said no additional update is available for the two outposts.
WeWork does not have any outposts in Broward or Palm Beach counties, according to its website.
Uncertainty over the Southeast Financial Center and Lenox Avenue spaces comes a month after WeWork filed a court notice to reject the Lenox Avenue lease, records show. WeWork said it actually wants to stay at the office building, but has been unsuccessful in reaching an agreement with the landlord, the South Florida Business Journal reported. It filed the notice of potential rejection of the lease in case it fails to reach an agreement.
Miami-based Azora Exan, a joint venture between Madrid-based private equity manager Azora Capital and Miami-based real estate manager Exan Capital, owns the five-story office building at 429 Lenox Avenue. Led by Juan Jose Zaragoza, Azora Exan paid $37 million for the property in 2022, according to records. The building is fully leased to WeWork, potentially putting Azora Exan in a tough spot if the co-working firm closes its South Beach branch.
The Azora Exan manager for the Lenox Avenue building didn’t immediately return a request for comment.
WeWork leased about 90,000 square feet on four full floors at the 55-story Southeast Financial Center in 2017. Spanish billionaire Amancio Ortega, through his Pontegadea real estate office, owns the 55-story building.
WeWork’s longest-running Miami-Dade lease is at Brickell City Centre, where the firm took nearly 65,000 square feet in 2016. In 2017, the firm leased 33,600 square feet at 2222 Ponce de Leon Boulevard and another 57,000 square feet at 255 Giralda Place. WeWork took about 30,000 square feet at Wynwood Garage in 2019.
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Since its bankruptcy filing, WeWork has carved a path forward on more than 97 percent of its leases globally. This could mean that it kept or reworked he leases. The reorganization is expected to reduce the firm’s total rent commitments by over $11 billion, according to a WeWork news release.
The 89 U.S. and Canada outposts the firm is continuing to lease are in addition to 77 previously announced lease assumptions. In total, WeWork plans to have more than 170 outposts in the U.S. and Canada and 337 globally once it emerges from bankruptcy this month.
WeWork’s reorganization plan calls for shedding $4 billion in debt and gaining $450 million in new financing, including $337 million from Santa Barbara, California-based property tech company Yardi Systems.