WeWork Inc.’s base of Orange County properties, already slimmed down from several years ago, have thus far been largely untouched by the company’s bankruptcy filing this month.
The once high-flying coworking firm (NYSE: WE) said it will cancel leases for nearly 70 of its “underperforming” properties in U.S. and Canada, regulatory filings pertaining to its Chapter 11 filing indicate.
Only one of those sites is in OC.
That space, a 75,000-square-foot location at 18191 Von Karman Ave. in Irvine’s Lakeshore Towers, was already closed. The Business Journal was first to report on that spot near John Wayne Airport closing in May of this year.
The Lakeshore closure marked the first reported local retrenchment for WeWork since 2020, when the New York-based company backed out of a deal to take a full building at Irvine’s Spectrum Terrace and shuttered other locations as part of ongoing portfolio struggles.
Following the closing of its Lakeshore Towers location in the spring, WeWork in the summer closed its 60,000-square-foot location at the Boardwalk office campus in Irvine.
At its height, WeWork’s collection of 10 open and soon-to-open locations in OC totaled close to 600,000 square feet, according to Cushman & Wakefield data.
Today, it counts five open OC locations totaling less than 300,000 square feet.
Companywide, WeWork operates over 750 locations across 37 countries.
WeWork’s recent retrenchment mostly affects properties in its home city.
It plans to reject leases for 38 of its New York spaces, according to court filings.
Other cities where WeWork aims to cancel leases include San Francisco, Los Angeles and Atlanta, among 13 others.
The company’s local footprint consists of 200 and 400 Spectrum Center and 2211 Michelson Drive in Irvine, one at Newport Beach’s Redstone corporate center at 4041 Macarthur Blvd. and another at 695 Town Center Drive at Costa Mesa’s Park Tower.
In addition to the lease rejections, the company also says it is looking to renegotiate lease terms with 400 landlords where it currently has space; specific locations for those renegotiations weren’t specified in early day bankruptcy filings.
Fall From Grace
WeWork’s plans to shed properties and file for bankruptcy come after its brief stint as the most valuable startup in the U.S.
The company, which sported a $47 billion valuation four years ago, began its downfall after filings for its 2019 IPO exposed hefty losses. In 2018, for instance, the company lost $1.9 billion on $1.8 billion in revenue, according to national reports.
WeWork subsequently nixed its plans for a traditional IPO.
Two years later, WeWork went public by merging with special purpose acquisition company, or SPAC, BowX Acquisition Corp. The SPAC deal initially valued WeWork at $9 billion.
Shares in the company last week were trading around $1.75, giving it a $94 million market cap.