WeWork has hired JLL and Newmark Knight Frank to help it negotiate rent relief or convert lease deals into profit-sharing agreements.
The co-working firm has stopped paying rent at some of its locations in the U.S. for April as it aims to renegotiate its leases, according to the Wall Street Journal. Multiple other businesses in the country, including Equinox, have also not been paying their April rent.
WeWork had been aiming to lower rent costs and shift its leases to management agreements well before the coronavirus pandemic. Its massive real estate expenses threatened to exhaust its cash following its botched initial public offering attempt last fall, but it was bailed out by its principal investor, SoftBank.
The office-sharing company has controversially kept its U.S. locations open during the pandemic, but most have emptied out as tenants practice social distancing and adhere to government stay-home orders. WeWork is also suing SoftBank over allegations that it wrongfully backed out of an agreement to buy $3 billion of WeWork shares.
Some of the firm’s landlords said WeWork has paid them, while others still have not received the rent.
A spokesperson for WeWork told the Journal in a statement that the firm does not have a companywide policy on rent payments. Instead it is “individually reaching out to our more than 600 global landlord partners to work in good faith towards finding asset-specific solutions that benefit all parties involved.” [WSJ] — Eddie Small
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