About two months ago, WeWork called Dallas-Fort Worth a “priority market.” Now, the financially troubled coworking giant is walking away from four office properties in the region.
WeWork has failed to renegotiate its leases with landlords at Williams Square in Irving, Victory Park in Dallas, Legacy Town Center in Plano and Legacy West in Plano, Bisnow reported, citing a filing with the U.S. Bankruptcy Court for the District of New Jersey.
After the company rejects those leases on May 20, it will have three remaining company-branded locations in DFW — the Clearfork building in Fort Worth, 1920 McKinney Avenue in Uptown Dallas and the Preston Center in North Dallas.
“Our intention is to stay in as many buildings in Dallas as possible under economic terms that position all parties for a sustainable future,” a WeWork spokesperson told the outlet. “Unfortunately, we have been unable to reach agreements with a small number of our landlords, and it is therefore prudent that we plan for other outcomes, which may include exits.”
New York-based WeWork filed for bankruptcy in November and has been working to renegotiate “nearly all” of its leases throughout the country. The firm has restructured 90 percent of its 500 global locations, resulting in significant savings. The closures and changes to lease terms already undertaken are anticipated to save the company over $8 billion in future rent commitments, accounting for more than 40 percent of its total rent costs.
While talks with other landlords in Dallas continue, WeWork must prepare for potential rejections as part of its bankruptcy exit strategy. KBS Realty Advisors, the owner of Legacy Town Center, is in “active negotiations” with WeWork and is optimistic that a resolution will be reached.
The other landlords involved in the recent rejections include Asana Partners (Victory Park), Hillwood (Williams Square) and the Karahan Companies (Legacy West).
In addition, WeWork plans to reject a management agreement at 3309 Elm Street in Dallas, which is operated by Common Desk, a coworking firm acquired by WeWork in 2022. We Work is working to maintain leases at its three remaining DFW locations.
—Quinn Donoghue
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