WeWork strikes new agreement at New York City office tower in quest for viability

WEWORK, the embattled co-working giant navigating a bankruptcy, is keeping a Manhattan office spot largely leased to Amazon.com through a deal that includes reduced rent and a shortened lease term.

WeWork reached a new agreement with its landlord for its space at 1440 Broadway, according to a filing on Tuesday (Dec 12). The firm will continue to operate 300,000 square feet spanning 10 floors at the building. The court will still need to approve the agreement.

WeWork’s bankruptcy filing in early November set off a tense process surrounding many of the co-working firm’s leases, many of which the company sought to cancel or renegotiate. So far, WeWork has cancelled around 70 of those contracts and expects to request more in the coming weeks, Steven Serajeddini, an attorney with Kirkland & Ellis who represents the company, said in a bankruptcy hearing on Monday.

Once the biggest private office tenant in Manhattan, the company immediately nixed dozens of leases in New York City upon filing for bankruptcy. Some landlords have objected to the company’s plans to shut down many of its locations. Although in recent weeks, several of them have withdrawn formal objections through court filings.

In Chapter 11, companies have up to 210 days to decide whether to cancel a lease, giving the firm around seven months to reach concessions with landlords or otherwise exit the agreements. Other contracts, such as those with vendors, have no time limit.

The deal with 1440 Broadway allows WeWork to maintain a foothold in a New York City building that’s in the heart of Times Square.

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“We’ve reached a significant number of positive agreements with landlord partners globally, representing sizeable progress towards our goal of reduced rent and tenancy expenses,” Peter Greenspan, WeWork’s head of global real estate, said. “We look forward to finding more win-win solutions that create long-term, sustainable value.”

A WeWork spokesperson declined to comment on its contracts with Amazon.

A joint venture of CIM and Australian pension fund QSuper own the building, according to loan documents. Filings on a US$399 million commercial mortgage-backed security tied to the property say the loan has transferred to special servicing and the landlord will be deeding the property back to the lender. A representative for CIM declined to comment.