WeWork has completed lease renegotiations or rejections across 90% of its global real estate portfolio as it prepares to exit Chapter 11 bankruptcy protection in North America.
The company said it has saved $8bn (£6.4bn) in future rent obligations, a reduction in future rent commitments by over 40%.
It has restructured nearly all 500 locations through a combination of amended leases, new management agreements and lease terminations, and now expects to exit the Chapter 11 process by 31 May.
This has included around 150 lease amendment agreements with landlords, some of which are complete with others in various stages of execution, as well as around 150 locations where the company accepts the existing lease terms.
The company has also rejected roughly 150 leases, with building exits completed or in progress.
WeWork also said that holders of 92% of its secured notes had agreed to write off $3bn in debt.
In September 2023 WeWork started discussions with landlords around the world to renegotiate almost all its leases and exit any that it deemed “unfit”.
The evaluation reviewed the current and long-term economic viability of over 500 WeWork-owned locations in a bid to reduce future rent expenses and improve operating efficiency.
As a result, the company said it “is on track to deliver strong and sustainable financial performance following the completion of its restructuring”.
WeWork chief executive David Tolley said: “The size, scope, and complexity of our real estate restructuring is unprecedented in our industry, and we have made remarkable progress to date optimizing our building footprint.
“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 20m sq ft of real estate in over 20 countries around the world.”
Global head of real estate Peter Greenspan said: “We are extraordinarily grateful to the many landlords who have collaboratively worked with us to reach agreements.
“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.”
Photo © Erik Pendzich/Shutterstock
Send feedback to Chanté Bohitige
Follow Estates Gazette
