WeWork is exiting dozens of leases, but the bankrupt company inked a deal to stay put in a Times Square property.
The co-working company agreed with owners CIM Group and Australian pension fund QSuper to continue operating 300,000 square feet at 1440 Broadway, Bloomberg reported. The lease term will be shortened and the rent will be reduced on the 10 floors held by WeWork, mostly leased to Amazon.
Because of WeWork’s bankruptcy, the court is required to approve the agreement. That approval is pending.
In October, Los Angeles-based CIM and QSuper initiated the process to hand the property’s keys back to the lender. The $399 million loan backed by the property was sent to special servicing that month, according to Trepp.
CIM refinanced the office tower in 2021 with floating-rate debt securitized by JPMorgan Chase into a single-asset CMBS deal. Within months, however, the loan was watchlisted and the owners struggled to cover monthly debt service.
As of March, the property was 91 percent occupied, according to Trepp. Amazon holds a 210,000-square-foot sublease from WeWork.
The co-working company is moving to shed dozens of leases through the Chapter 11 bankruptcy process, much to the dismay of many of the company’s landlords. The company has cut roughly 70 leases so far and more are expected to hit the chopping block as the company has 210 days to determine lease cancellations.
WeWork head of global real estate Peter Greenspan said in a statement to Bloomberg the company has “reached a significant number of positive agreements with landlord partners globally, representing sizable progress towards our goal of reduced rent and tenancy expenses.”
CIM declined to comment to the publication.
— Holden Walter-Warner