Join the movement at Inman Connect Las Vegas, July 30 – August 1! Seize the moment to take charge of the next era in real estate. Through immersive experiences, innovative formats, and an unparalleled lineup of speakers, this gathering becomes more than a conference — it becomes a collaborative force shaping the future of our industry. Secure your tickets now! Learn more.
WeWork, the bankrupt provider of coworking spaces, is aiming to emerge from chapter 11 bankruptcy by the end of May thanks to projected savings of up to $8 billion through the restructuring of leases, the company announced Tuesday.
The company, which rose to become a high-flying, $47 billion unicorn more than a decade ago before falling on hard times, has agreed to amend leases with landlords under conditions more reflective of commercial real estate markets, according to executives who filed for bankruptcy protection in November.
“We are well on our way to building a strong and sustainable WeWork,” CEO David Tolley said in a statement. “We remain committed to emerging from our global real estate and financial restructuring later this quarter, and expect to do so with little to no debt and as a continuing leader in our industry, operating over 20 million square feet of real estate in over 20 countries around the world.”
WeWork is in the process of rejecting — or has rejected — an additional 150 leases, while an additional 150 leases are to remain as is.
These negotiations should bring the company a 40 percent reduction in total future rent commitments, according to the announcement. WeWork also announced that it has reached an agreement with holders of 92 percent of its secured notes to convert its bonds into equity and eliminate over $3 billion of the company’s $3.6 billion secured debt.
The company has reportedly been negotiating with its landlords since September, prior to its declaration of chapter 11 bankruptcy. The negotiation process continued through the company’s bankruptcy. The company has struggled to keep its losses under control as it worked to renegotiate leases, with the firm losing $122 million in February alone, according to bankruptcy filings.
“We are extraordinarily grateful to the many landlords who have collaboratively worked with us to reach agreements,” said Peter Greenspan, global head of real estate. “We want to build the future of WeWork with our landlords as partners and since we embarked on this process, our goal has been to find a positive future in as many of our buildings as possible. While there is still more work to be done, and some hard decisions remain, the majority of this project is now behind us.”
Once a venture capital darling, WeWork gradually ran out of funding after an attempt at an initial public offering revealed financial mismanagement, resulting in the ouster of its founder Adam Neumann — who is currently in the midst of a bid to buy back the company for $500 million. Thousands of employees were laid off after the post-covid office market ate further into the company’s bottom line before it declared bankruptcy in November.
