WeWork ditches offices across Phoenix after Chapter 11 bankruptcy


A bankrupt WeWork is whittling down its co-working offices in Phoenix, with one landlord engaged in a legal battle over unpaid rent.

The New York-based co-working firm has filed plans to bail out of a lease at 101 East Washington Street; grapples with a lawsuit over a rent dispute at 2425 East Camelback Road; will not reoccupy former offices at 101 North First Avenue; and has ditched a floor at 430 North Scottsdale Road in Tempe, the Phoenix Business Journal reported.

In November, the startup once valued at $47 billion filed for Chapter 11 bankruptcy protection, allowing it to get out of money-losing leases without paying much, if anything, to its landlords. Other creditors stand to get pennies on the dollar.

Since then, WeWork has faced nearly 1,300 court filings, while filing notice last week of its intent to reject 92 of its leases, according to a spokesperson. The firm also said it has made “substantial progress” in its lease renegotiations, saving more than $1.5 billion.

Late last month, the firm informed a bankruptcy judge of plans to reject its lease on Feb. 7 for 45,000 square feet of offices at the mixed-use Block 23 at CityScape at 101 East Washington Street, in Downtown Phoenix. 

It expects to abandon furniture, fixtures and equipment in the building owned by City Office REIT, according to the Business Journal.

Last month, an affiliate of New York-based Monarch Alternative Capital filed a motion with the bankruptcy court to force WeWork to pay $195,724 in unpaid rent, taxes and operating expenses for the month for 54,000 square feet of offices at the Esplanade at 2425 East Camelback Road, in Biltmore. A hearing is set for Feb. 20.

Since it filed for bankruptcy last fall, WeWork has given up half its 68,000 square feet at the Watermark offices at 430 north Scottsdale Road in Tempe, owned by Los Angeles-based Fenix Development.

After the filing, WeWork also rejected its lease for more than 50,000 square feet of offices at 101 North at 101 North First Avenue, in Downtown Phoenix. The firm is not looking to reoccupy or lease the former digs, its owner said last month.

Todd Gooding, owner of Portland-based developer ScanlanKemperBard, told the Business Journal in November that it had locked WeWork out of its building for failure to make lease payments prior to its bankruptcy filing.

— Dana Bartholomew



Source link

About The Author

Scroll to Top