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 07:20 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
These hotel markets have entered a depression
These hotel markets have entered a depression
These hotel markets have entered a depression
Cherre CEO L.D. Salmanson (Cherre/Facebook)
Real estate data firm Cherre raises $50M
Real estate data firm Cherre raises $50M
(Tropicana Las Vegas via Facebook, Bally's Corp)
Bally’s buys Las Vegas’ Tropicana casino for $150M
Bally’s buys Las Vegas’ Tropicana casino for $150M
Doctors and medical professionals have remained on time with their rent payments in the past year (iStock)
Medical offices are just what the doctor ordered for landlords
Medical offices are just what the doctor ordered for landlords
The rate of loans sent to special servicers continued to fall in March. (Unsplash)
CMBS special servicing rate declines in March
CMBS special servicing rate declines in March
JLL CEO Christian Ulbrich. (Getty)
JLL explores sale of China property management wing
JLL explores sale of China property management wing
Dollar General CEO Todd Vasos (Retail Industry Leaders Association, iStock)
Dollar General thrives amid retail apocalypse
Dollar General thrives amid retail apocalypse
Bill Lee (Lee & Associates/YouTube)
Lee & Associates founder Bill Lee dies
Lee & Associates founder Bill Lee dies
arrow_forward_ios

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

Loading...