In The Loop: WeWork Israel Turns To Franchise, IWG Fails To Get Out Of Lease, And More Industry News

In The Loop: WeWork Israel Turns To Franchise, IWG Fails To Get Out Of Lease, And More Industry News
Regus fails to get out of a $90 million lease over 15 years as San Francisco judge backs Vornado. 

WeWork Israel to Switch to Franchise Model 

Calcalist reported this week that “WeWork Israel is about to replace its current business model with a new franchise system.” According to the report, Ampa Real Estate Ltd will become WeWork’s first franchisee, taking over WeWork’s 13 coworking spaces across six cities. “Secret negotiations have been taking place for several months between WeWork’s corporate office and its local branch,” sources told the news outlet. Under the franchise business model, WeWork will receive a percentage of Ampa’s income in exchange for its use of the WeWork brand. 

Judge Backs Vornado in Case Against Regus 

The Commercial Observer reported this week that “a Superior Court Judge in San Francisco County ruled in favor of Vornado Realty Trust in its lawsuit against coworking firm Regus for its attempt to nix a 15-year lease,” which is estimated to be worth $90 million.  The flexible workspace company sent a termination notice for the lease in September of 2019, claiming their signage was being rejected by the city planning department. However, the judge backed Vornado since the permit application had not been formally and definitively disapproved by the city. 

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Landlords Eye the Flex Space Industry 

JLL shared this week that landlords are more eager than ever to team up with flexible workspace operators to fill up their empty space. “As workers return to the office, flex space is being buoyed by businesses deploying less capital into real estate and employees who have come to expect more choice over how and where they work.” Landlords are hoping to add more flex space to their portfolios to attract tenants. However, because flexible workspace operators aren’t willing to take on new leases, many landlords are turning to management agreements. Should this trend continue, it “has the potential to rapidly increase the amount of flexible space in the market.” 

For more flexible workspace news visit our Daily Digest section! 

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