WeWork’s newest tenant is the country’s largest office space occupant: the federal government.
The U.S. General Services Administration awarded the coworking company a $10 million contract to provide office space for government workers. The contract marks the first time the government has looked for coworking space, according to Commercial Observer.
Under the terms of the deal, when the government requests space from WeWork, the company will either use its existing properties or find new space to place government employees. The company will get paid after it secures the coworking space. WeWork’s contract is for one year, but there is an option to renew it for another four.
WeWork wasn’t the only company awarded a contract. Fellow coworking companies EXPANSIVE, The Yard, DeskPass and Liquid Space are also involved in the deal, Commercial Observer reported, citing sources familiar with the situation.
WeWork will also have to make some changes to its spaces that wind up hosting government employees, including beefing up security, adding reception areas and taking measures to ensure data privacy.
The federal contract comes as WeWork saw its net losses hit $888 million in the second quarter amid a pandemic that’s emptied office space across the country. But demand for flexible office space could rise as a compromise between traditional workplaces and permanent work-from-home arrangements.
Vice Media is rumored to be exploring a move to Dock 72 in the Brooklyn Navy Yard, which is developed by Rudin Management and Boston Properties in partnership with WeWork. The company is also negotiating a $150 million partnership https://therealdeal.com/2021/08/09/wework-cushman-negotiating-150m-partnership/ with Cushman & Wakefield, which would invest in WeWork’s planned SPAC later this year.
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[CO] — Holden Walter-Warner