Dr. Gleb Tsipursky – The Office Whisperer
Cat Johnson – Coworking Marketing Maven
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Andrea Pirrotti-Dranchak – Competitive Advantage
Jonathan Price – CRE & Flex Expert
Jeremy Fennema – Tech Innovation Alchemist
[bctt tweet=”A new report from real estate advisory firm Ackman Ziff has found that WeWork’s Soho and Flatiron deals could be in big trouble if the company’s coworking rates drop.” username=”allwork_space”]
The firm’s lease obligations are 2% below market rate in Soho and 4% below in Flatiron. The company’s average rent in Manhattan is $58.91 per square foot, which is 20% below the average rate. Currently, it leases 1.3 million square feet in the Financial District, which is about 16% below market rate.
According to Ackman Ziff, contractual rent increases for WeWork leases over the next five years will amount to a growth rate of 6.3%.
“Even though they are the largest office tenant in the city, it still, percentage-wise, is a small footprint relative to the larger market,” said Marion Jones, Managing Director at Ackman Ziff.
Despite this, WeWork and Regus have leased 8.7 million square feet of space in the city since 2017, making up 53% of New York’s absorption rate.
Jason Meister, co-author of the report, said that some of the city’s landlords will certainly struggle if they walk away from these WeWork commitments, creating vacancy pressures in those buildings and submarkets.
