WeWork bankruptcy might jolt several Bay Area office properties
WeWork has launched a bankruptcy proceeding that could potentially jolt several office buildings in the Bay Area.
SAN JOSE — WeWork has launched a bankruptcy proceeding that could potentially jolt several office buildings in the Bay Area — especially if the co-working firm terminates leases as it seeks to reorganize its feeble finances.
The coworking company, which offered swank and hip office spaces to tech companies, startups and individuals, stated in its bankruptcy filing that its debts totaled nearly $18.7 billion and assets of about $15.1 billion.
Yet tucked away in the filings and pronouncements that arose from the bankruptcy is an ominous declaration poised to rock further an already wobbly office market in the Bay Area and other major metro regions nationwide.
“WeWork is requesting the ability to reject the leases of certain locations, which are largely nonoperational, and all affected members have received advanced notice,” the company stated in a prepared release concerning the bankruptcy case.
Lease terminations would pose a fresh complication for Bay Area office building owners who are already attempting to cope with a rising tide of vacancies, sublease and wide-ranging retrenchment by the tech industry.
WeWork lists 17 locations in the Bay Area, according to its website:
— San Francisco, seven sites.
— San Jose, two locations, both in the downtown district.
— Oakland, two sites, both downtown.
— San Mateo, two locations.
— Berkeley, one site.
— Palo Alto, one location.
— San Ramon, one site.
— Mill Valley, one location.
The downtown San Jose office locations are the Riverpark Tower 333 West San Carlos Street and an office tower at 75 East Santa Clara Street.
The downtown Oakland office sites are a tower at 1111 Broadway and a midrise building at 2201 Broadway.
“We defined a new category of working,” said David Tolley, WeWork’s chief executive officer. “These steps will enable us to remain the global leader in flexible work.”