For years, landlords worldwide have demanded WeWork into their office buildings, making it the largest corporate tenant in New York and London. Now, WeWork is possibly days away from bankruptcy. With fewer employees in offices since the pandemic, companies have cut the amount of space they lease, causing a crunch in commercial real estate. Some landlords may quickly accept lower rents from WeWork as part of a bankruptcy reorganization, but others may have to fight in court to get anything. Experts believe the value of Class B and Class C buildings will be much less after a bankruptcy. WeWork has been a major tenant in many of New York’s older office buildings, but has recently stopped paying rent in some cases, impacting landlords’ ability to make debt payments. WeWork has locations in 39 countries but its shares have fallen 90 percent in the past few months. Experts predict a WeWork bankruptcy will be highly consequential for the New York market. WeWork occupied nearly all of the office space at 980 Avenue of the Americas, a mixed-use development owned by the Vanbarton Group, and their departure could leave a gap in the office market. WeWork was valued at $47 billion and its model was to rent out office space, but it faced economic issues. WeWork made a staggering $15 billion loss. WeWork once predicted to lease 30% of all US office space. Some landlords thought they would be somewhat insulated from WeWork problems.
The Potential Impact of WeWork’s Bankruptcy on New York’s Office Market
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