In a late Monday announcement, WeWork said it entered into a restructuring support agreement with the majority of its stakeholders to "drastically reduce" the company's debt while further evaluating WeWork's commercial office lease portfolio.
[Ads /]
WeWork is also requesting the "ability to reject the leases of certain locations," which the company says are largely non-operational, as part of the filing.
The company plans to terminate nearly 70 leases, court papers show. WeWork currently has 47 locations in New York City and 35 of them will soon shut down. Thirty-four of those locations are in Manhattan and one is in Brooklyn.
"They borrowed too much money, they rented too much space and there are not enough people coming through the door," said Aaron Elstein, who covers real estate for Crain's New York. "The one thing WeWork got really right was how they made people think this is something other than office."
But ultimately WeWork is an office subletting business that leases a lot of space. And it has had a lot of challenges -- including the pandemic which made both home practical and acceptable -- which is a trend that continues today and is why half of the offices in New York City are empty.
The bankruptcy is another blow for landlords, many of them accepting lower rents from WeWork in recent years.
"It's in no one's interest for these landlords to fail, but they're facing difficult times," Elstein said.
Elstein said we are on the verge of a commercial real estate crisis, but Kathryn Wylde, who runs the Partnership for New York City, has a glass-full perspective.
"We've got a very strong growing economy and that is more going to offset the losses and challenges," Wylde said. "The WeWork loss is big, but landlords will become more flexible."
At one point, WeWork was the largest private tenant in Manhattan.
The following New York City locations are listed in the bankruptcy filing:
-1 Little W 12th St
-1 Union Square West
-10 East 38th Street
-10 East 40th Street
-1156 6th Avenue
-130 Madison Avenue
-161 Avenue of the Americas
-1619 Broadway 11th Floor
[Ads /]
-183 Madison Avenue
-200 Broadway
-205 Hudson St
-22 Cortlandt Street
-229 West 36th Street 4th floor
-255 Greenwich Street
-261 Madison Ave
-28 West 44th Street
-311 W 43rd Street
-315 W 36th Street
-38 West 21st Street
-419 Park Avenue South
-437 5th Avenue
-437 Madison Avenue
[Ads /]
-44 Wall Street
-483 Broadway
-500 5th Avenue
-505 Park Avenue
-511 West 25th Street
-54 W 40th Street
-57 East 11th Street
-599 Broadway
-6 East 32nd Street
-7 West 18th Street
-8 West 40th Street
-81 Prospect Street, Brooklyn
-980 6th Avenue
(The Associated Press contributed to this report.)
ALSO READ | New York City, Tri-State animal shelters at capacity, emblematic of national crisis
----------
* Get Eyewitness News Delivered
* More New York City news
* Send us a news tip
* Download the abc7NY app for breaking news alerts
* Follow us on YouTube