RGN-Group Holdings, an affiliate of Regus Corp., filed for Chapter 11 protection this week, stating that the shift to remote working has damaged demand for its flexible workspaces.
“With the near universal adoption of work-from-home policies, either voluntary, or government-mandated, by U.S. businesses during the early months of the pandemic, demand for temporary office space has been depressed, which I understand resulted in lower occupancy rates than were anticipated when the company decided to make certain investments in the centers,” said James S. Feltman of financial advisory firm Duff & Phelps.
The initial case filings revealed that several other affiliates had filed their own petitions as they did not have the ability to uphold lease obligations to landlords due to losses caused by the pandemic.
RGN-Group Holdings will use the Chapter 11 to negotiate new lease terms and protect occupants from the ongoing interference the business is undergoing. The group owes parent company Regus $427 million for working capital loans that are used towards furniture and equipment used for the office space.