WeWork, the shared workplace company famous for its high-profile corporate collapse, is trying to shed another Atlanta location as it works to forge a new financial path through Chapter 11 bankruptcy.
The co-working company, which was once valued at $47 billion, filed for bankruptcy protection in November and has since been trying to cut loose unprofitable locations. During its initial round of cuts, the New York-based company rejected dozens of leases. The first cuts included two in Atlanta — Buckhead’s Tower Place 100 and The Boundary in Midtown.
On Dec. 29, WeWork asked a federal judge for permission to reject eight more leases across four cities, including its West Midtown location at The Interlock along Howell Mill Road.
WeWork has been battered by billions of dollars in losses after it bungled its 2019 initial public offering and struggled to adapt to the COVID-19 pandemic’s impacts on the wider office market. WeWork shares, which peaked at $13.02 in October 2021, dropped to mere pennies before trading of its stock was halted ahead of filing for Chapter 11, which allows companies to reorganize their operations and debt and remain in business.
In November 2022, a year before it filed for bankruptcy protection, the company opened its 11th metro Atlanta location. The West Midtown location, a 39,000-square-foot workplace, boasted amenities like a furnished wellness room and a coffee bar with kombucha on tap.
Online real estate publication Bisnow first reported WeWork’s effort to shed the eight leases, which also includes locations in Dallas, San Francisco and Toronto. A WeWork spokesperson told The Atlanta Journal-Constitution that those locations are “no longer operational,” with members relocated to other WeWork offices or workplaces.
“We continue to proactively engage with our real estate partners to better align our long-term financial interests and find mutually beneficial lease agreements,” the spokesperson said in a written statement. “Atlanta continues to be an important market for WeWork, with strong demand for flexible office space, and we look forward to our continued operations in the city.”
Credit: Steve Schaefer
Credit: Steve Schaefer
WeWork doesn’t own office buildings. It leases office space from landlords and then designs its offices and subleases space to individuals, small companies and even Fortune 500 corporations, typically on short terms.
But through the bankruptcy process, WeWork is attempting to offload leases it deems too costly. Any rejected leased offices will be thrust back onto the office market, which is already teeming with unwanted space.
At the end of September, nearly a third of all office space in metro Atlanta was either vacant or available for sublease, according to real estate services firm CBRE. WeWork’s 11 locations combined to roughly 623,000 square feet of workspace — nearly as much space as the office component of Ponce City Market.
For the eight WeWork locations in metro Atlanta that the company plans to keep, operations should be unaffected by the bankruptcy proceedings. But the list of rejected leases could change.
Cousins Properties hinted last year that two more WeWork locations could join that list.
On a third-quarter earnings call, Cousins executives said WeWork was behind on rent payments for its offices at the 725 Ponce tower along the Beltline’s Eastside Trail and 120 West Trinity in Decatur. They anticipated both leases would be rejected if WeWork declared bankruptcy.
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