WeWork puts more leases in the keeper pile

Co-working company retains locations in DC, Chicago, Boston, LA

WeWork Clutching Tight to National Footprint

A photo illustration of WeWork CEO David Tolley (Getty, WeWork)

When WeWork filed for bankruptcy, it gained the ability to exit leases, leaving hundreds of landlords on edge. But 16 of them just got a reprieve.

This week, the beleaguered co-working company announced that it filed to assume those leases, the Commercial Observer reported. The locations stretch across the country and tiptoe into Canada.

In addition to two locations in Los Angeles, WeWork is hanging on to two locations in Boston, one in Washington, D.C., two in Chicago, two in Colorado, several others in California and one in Vancouver.

While WeWork is keeping those locations, it isn’t necessarily keeping them under the same lease terms or with the same square footage. The lease assumptions are subject to court approval.

Last week, WeWork moved to assume another nine leases in North America. The recent spate of retentions is in sharp contrast to the 80 global leases David Tolley’s company rejected early in its Chapter 11 proceedings.

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WeWork last month unveiled an agreement to exit bankruptcy. It includes a $337 million capital injection from Yardi Systems and $112 million from existing bondholders. The $450 million investment, subject to court approval, will support its operations after its bankruptcy, according to a company spokesperson.

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In the new deal, Yardi LLC Cuper Grimmond will get a 60 percent equity stake in WeWork, a group of lenders will get 20 percent and another group, including longtime WeWork investor SoftBank, will get the remaining 20 percent.

Adam Neumann — the co-founder of WeWork — plotted to buy the company that got rid of him in the wake of its failed IPO in 2019. Neumann put together investors and vowed his new company Flow would beat any offer for WeWork by 10 percent, but his former firm never extended him a non-disclosure agreement that would allow him to see WeWork’s books and make a formal bid.

He has signaled the potential to challenge the Yardi deal.

Holden Walter-Warner