WeWork dumps several Manhattan locations
Co-working firm is looking to go public via a SPAC
WeWork recently exited several leases in Manhattan as the company eyes turning a profit by the end of the year — and a potential public offering via a special-purpose acquisition company.
In recent weeks, the company closed and exited four locations in Midtown, Soho and the Meatpacking District, a WeWork spokesperson confirmed to The Real Deal. It’s also relocating members from a fifth location in Midtown where the company is in discussions with its landlord about the space.
“Over the last twelve months, WeWork has continued to rationalize its global real estate portfolio as a part of the company’s plan to achieve profitability,” the spokesperson wrote in an email. “With an abundance of supply in the market, we have worked with our landlord partners to rightsize our footprint across New York City where we will continue to provide our members with unmatched space, service, and flexibility.”
The closed locations are at the Sapir Organization’s 261 Madison Avenue, the Chetrit Group’s 404 Fifth Avenue and 428 Broadway, and William Gottlieb Real Estate’s 1 Little West 12th Street. At the Durst Organization’s 205 East 42nd Street in Midtown, where WeWork leases 125,000 square feet, the co-working company has told members it’s closing the space and is relocating them to other locations.
A spokesperson for the Durst Organization said WeWork’s vacancy “provides an opportunity to reposition the space, activate a dozen outdoor terraces and collect a higher rent.”
The closures come as WeWork looks to become profitable by the fourth quarter of this year. CEO Sandeep Mathrani told Reuters earlier this month that the company is “completely on track” to turn a profit by year’s end. He said the firm has $3 billion on its balance sheet, enough to get the firm through 2022.
Mathrani and the company’s board have also been in discussions to go public via a SPAC affiliated with BOW Capital Management and at least one more SPAC. The deal would value the firm at around $10 billion, according to the Wall Street Journal, which first reported the news.
WeWork may also consider an additional private investment round. “Our significant progress combined with the increased market demand for flexible space, shows positive signs for our business,” a spokesperson for the firm told the publication. “We will continue to explore opportunities that help us move closer towards our goals.”
WeWork hired JLL and Newmark Knight Frank last year to review the company’s portfolio and cut costs by negotiating rent relief or converting leases into profit-sharing agreements. Mathrani in June said the company was rethinking one in five leases.