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comment by uhsguy
uhsguy  ·  1446 days ago  ·  link  ·    ·  parent  ·  post: WeWork Skips Some Rent Payments as Coronavirus Undermines Revenue

Wework is politely reminding landlords that signed leases with them that they are idiots and now are trapped with no recourse. The rent comes through some uncapitalized subsidiaries so they have no claim on core wework assets without heavy litigation.





kleinbl00  ·  1446 days ago  ·  link  ·  

...which matters little as WeWork's core assets are a hole in the ground at this point.

They've even knocked $10m off the jet.

uhsguy  ·  1446 days ago  ·  link  ·  

Well it does because if they could go after the the core asset then the landlord could force then into liquidation and restructuring a lot faster. This way they can exist as a zombie for years to come and do things on their own terms. They may actually end up alright after they reduce their leases and debt though aggressive cram downs and restructuring, woe to anyone that is owed money or has them as a tenant though. I would assume that whoever their current landlords are will also go bankrupt and their creditors will get stuck with the losses.

kleinbl00  ·  1446 days ago  ·  link  ·  

Yeah - but what I'm saying is liquidating WeWork is going to be a grindingly unsatisfying exercise. Even their S1 lists $27b in assets and $24b in liabilities and that doesn't include their $47b in leases due. They go Tango Uniform and there's $47b in leases looking for $3b in remedy of which the big stuff has already been sold off.

The fact that their core is well-protected is fundamentally irrelevant if their bank vault is empty anyway.

cgod  ·  1445 days ago  ·  link  ·  

I guess you just change the locks and see how much you can get for a cold brew kegarator on Craigslist.

uhsguy  ·  1445 days ago  ·  link  ·  

You could but it’s probably not much. Having a commercial tenant in the building that’s late on Rent may be preferable to leaving the building empty and abandoned

kleinbl00  ·  1445 days ago  ·  link  ·  

I think there will be a lot of simply assuming the contracts.

WeWork was predicated on this idea that you had a "membership" that allowed you to jet around to all these other offices all over the place and I think that business model is done for a few years at least. At which point you recognize that your landlord isn't WeWork, it's whoever actually owns the building. I've probably linked these guys a half-dozen times; subleasing isn't fucking rocket science.

goobster  ·  1445 days ago  ·  link  ·  

THIS.

WeWork goes away, but the tenants stay and begin paying slightly higher rents to the building owners. Because the owners don't want the space vacant, anyone paying WeWork's rent can afford a little more, and the building landlord just hires someone to manage all the "small" contracts that were too small for them to consider as renters before.

That is, once people are allowed to go inside the buildings again....

kleinbl00  ·  1445 days ago  ·  link  ·  

Plus short-term leases are much more attractive if you feel like selling the building because it means you can do what you want without having to wait six years or buy someone out.