Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
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WeWork’s lease challenges are proving to be even more complicated than expected after real estate developer DivcoWest announced that it’s suing WeWork — seeking at least $30 million in damages.
The allegations? DivcoWest is accusing WeWork of defaulting on rent payments, breaching a lease agreement, and vacating a prime New York office property near Times Square without the necessary written consent, as reported by both The New York Post and CoStar.
More specifically, this lawsuit, which was filed in the New York State Supreme Court in Manhattan, claims that WeWork failed to pay approximately $473,892.64 due for its lease at 311 W. 43rd St. in midtown Manhattan.
The allegations against WeWork, if true, could be indicative of the company’s deeper financial challenges. If other landlords follow DivcoWest’s lead, WeWork could face a cascade of piling legal and financial challenges.
WeWork has recently expressed concerns about its lease obligations, even suggesting a “substantial doubt” about its future viability. WeWork has since announced plans to exit underperforming locations and renegotiate almost all of its leases, and it seems to be acting on this plan. While the demand for flexible workspaces will likely remain, businesses and remote workers might be more cautious about entering long-term agreements with coworking providers.
