What’s going on:
WeWork has made the decision to close its 75,000-square-foot office located in Irvine, Calif. This closure comes after other closures in Costa Mesa and Newport Beach, as well as the cancellation of a lease deal for an entire building at Spectrum Terrace in Irvine in 2020, according to The Real Deal. Tenants at the Irvine office were given less than a month’s notice and were provided with the option to relocate to a nearby WeWork office.
Why it matters:
The decision to shut down properties in Orange County shows that WeWork is reevaluating its real estate portfolio. As one of the largest shared workspace providers in the world, WeWork’s performance may provide key insights into the broader commercial real estate market and the demand for flexible workspaces.
WeWork’s closures in California also reflect its ongoing corporate struggles. The company encountered multiple hard-hitting challenges in recent months, including the two big announcements of CEO Sandeep Mathrani and CFO Andre Fernandez leaving the company. The two announcements occurred within a week of each other.
How it’ll impact the future:
WeWork is making efforts to avoid being delisted from the New York Stock Exchange by conducting debt restructuring and reevaluating its portfolio. As the coworking industry adapts and grows in the post-pandemic landscape, WeWork’s decisions and performance may influence the broader scope of the industry. WeWork’s position as a major player in the coworking industry may also influence the confidence of prominent investors considering investments in the rise of coworking spaces.
WeWork’s share price opened Thursday at 17 cents.