WeWork stopped paying rent in April on some of its locations to try to cut costs and hired JLL and Newmark Knight Frank to renegotiate its leases. Knotel has also failed to pay April’s rent for locations including 61 Broadway, 40 Exchange Place, and 5-9 Union Square West.
- Heard on the Street: Aurora Capital Associates’ Jared Epstein told CO: “WeWork didn’t pay on any of our locations, we didn’t receive a notice…That’s a scary situation.”
- Tenants bail in mass: WeWork’s occupancy rate fell to roughly 64 percent at the start of April, down from 79 percent at the end of September. One person cautioned to FT that the drop did not yet account for the full economic fallout of the crisis and the surge of cancellations the company was still girded for.
- Big picture: In Manhattan, co-working companies lease a total of 14.7 million square feet and take 3.1 percent of its office inventory. The top five co-working firms — WeWork, Knotel, Regus, Convene and Spaces — are committed to paying more than $755 million in annual rental income to landlords until 2030. If all the co-working space went back on the market, it would increase Class-A availability rates from its current 11.6 percent to 17.2 percent,
- Former WeWork employee: “The co-working firm is taking its time processing termination requests and is fighting for every penny…. Adam sold us on changing the world –– new CEO Sandeep Mathrani has turned us into collection agents.”