The concept died with Covid-19. At the end of the last decade, office sharing was on the rise, and its promoter WeWork had been valued at nearly 47 billion dollars (43.7 billion euros). Today, with teleworking, the office is shared at home, and WeWork has low-occupancy premises in city centers for which it pays too much. On September 6, the company, which was only worth 300 million dollars, announced that it would renegotiate all its leases. WeWork had 777 rental locations in 39 countries as of June and has financial commitments of more than $13 billion, according to the Financial Times.
In a press release, the company indicates that it intends “take immediate action to permanently repair [son] rigid and expensive lease portfolio »a situation inherited, according to her, from a “period of unsustainable hypergrowth”. The company will, among other things, leave certain “unsuitable and poorly performing locations”. Of course, his boss, David Tolley, explained: “Let me finish by clarifying one thing. WeWork is here to stay. » Except that the company has expressed doubts about its viability and, in the very likely event of bankruptcy, lessors will be left with empty offices.
In the United States, the real estate crisis is above all that of the office, while Americans are reluctant to return to work on site, particularly in large cities, such as San Francisco (California) or New York. Constantly, the mayor of New York, Eric Adams, invites his constituents to return face-to-face, believing that they cannot stay ” in pajamas ” all day. But he failed to force municipal employees to return completely to their workplaces. WeWork occupies only a small share of the Manhattan office market, about 1.5%, according to the Financial Times. However, WeWork represented a quarter of new commercial leases in New York in the first quarter of 2023, and its collapse adds to the difficulties of a market that did not need it.
“A flight of tenants towards quality”
Some landlords had seen the deal coming, changing tenants even if it meant lowering prices, such as Sage Realty, which rented premises previously occupied by WeWork to the Spanish bank Santander on the famous Madison Avenue. In New York, WeWork occupied premises that were sometimes aging, and its difficulties will increase the gap between modern New York, which took over the Hudson Yards district just before the Covid-19 crisis, or recently the One Vanderbilt tower, just next to Grand Central, which now offers the most beautiful view of New York, and the old and long-abandoned buildings.
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