WeWork tells landlords: WeCan’t Stay.
Walking through Lower Manhattan last week, I came across a sign: “Office shutting down? #WeWont.” The ad was for Codi, a flex-office provider poking fun at its struggling rival.
WeWork was not amused. The company sent Codi a cease and desist letter, citing “unauthorized use and misappropriation of WeWork’s intellectual property, false advertising and tortious interference with WeWork’s contractual relations,” TechCrunch reports.
Codi also has a “WeWork Relief Fund” to offer discounted office spaces to former WeWork members. This is clearly a company with a sense of humor.
WeWork filed for Chapter 11 bankruptcy protection Monday and is seeking to cancel 69 commercial leases, 40 of which are in New York City. This move was, obviously, in the works for a long time. Trepp even called it “yesterday’s news,” saying on X, formerly Twitter, that “WeWork has been a plague on the #CRE & #CMBS houses since 2019.” Ouch.
News surfaced last week that WeWork would declare bankruptcy as early as this week, and the company warned back in August that it had “substantial doubt” that it could continue to exist.
The company tried to renegotiate “nearly all” of its leases in 45 days, and according to the Wall Street Journal has exited hundreds of its leases since 2019. But it wasn’t enough.
The firm is seeking court approval to cancel its leases at Kushner and RFR’s 81 Prospect Street in Dumbo and Vanbarton’s 980 Sixth Avenue, Keith Larsen and Rich Bockmann report.
Meanwhile, competitors are already swooping in to replace WeWork in some locations. Codi CEO Christelle Rohaut said her company is negotiating with dozens of WeWork landlords in New York City and San Francisco.
“We expect these discussions to accelerate in light of WeWork’s bankruptcy filing,” she said in a statement. And that’s no joke.
What we’re thinking about: What will a post-reorganization WeWork look like? Will the firm’s collapse dull the excitement over future real estate startups? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: The Real Estate Board of New York has teamed up with Manhattan District Attorney Alvin Bragg to teach commercial landlords how to deal with illegal cannabis shops. The group held a webinar about best practices for evicting an unlicensed shop and avoiding fines, in compliance with Local Law 107.
Elsewhere in New York…
— More than 10 times as many babies were born with syphilis in the U.S. last year than a decade ago, Gothamist reports. The total was 3,761 cases, according to the Centers for Disease Control and Prevention.
— Some elected officials are concerned that the investigation into a possible straw donor scheme is distracting from the mayor’s response to the migrant crisis, Politico New York reports. “This level of fiscal stress requires complete focus, and it is concerning how many legal fires are surrounding him,” City Council member Sandy Nurse told the publication. Gov. Kathy Hochul, however, defended the mayor. “He has been laser-focused on this,” she said. “We have a lot of work to do, so I have full confidence that he will not be distracted.”
— Oops? Both Democrat Amber Adler and independent Igor Kazatsker, who is running on the “Team Trump” line, are vying for Brooklyn’s District 48 seat. But they also have employed the same consultants, the City reports. Campaign finance records show that Adler paid APOC NY $14,000 and that Kazatsker paid the firm $27,000. They also paid North Shore Strategies $31,000 and $4,000, respectively, and hired the same election attorney, Aaron Foldenauer. Republican Inna Vernikov, who is running against both, accuses Kazatsker of trying to split the vote to help Adler.
Closing time
New to the Market: The priciest residence to hit the market Tuesday was a condo at 455 West 20th Street in West Chelsea asking $17 million. Compass has the listing. — Jay Young