Insights On WeWork’s Office Space Strategy

The news is full of stories regarding yesterday’s call by WeWork to its landlords serving notice that they were seeking to renegotiate nearly all their leases. This was accompanied by a letter from WeWork CEO David Tolley who stated inter alia that “[a]s part of these negotiations, we expect to exit unfit and underperforming locations” in order “to achieve the sustainable operating model that we need“. Mr. olley concluded his letter by saying that “WeWork is here to stay. We will remain a global flex space leader, and trusted real estate partner to our members.”

This unusual gambit was clearly intended to set the tone for negotiations and provide WeWork with the upper hand in the discussions between their real estate advisor Hilco Global and the company’s landlords. As is my wont on these matters, I consulted the general counsel of Wharton Property Advisors Eric Haber who is also a bankruptcy attorney, for his take on the situation.