WeWork should emerge from bankruptcy protection with a much less ugly balance sheet, says Chris Bryant for Bloomberg Opinion.
A WeWork logo is seen outside its offices in the Queens borough of New York City, US, on Nov 7, 2023. in a fitting coda to the free money era.
The bankruptcy filing paves the way to cancel US leases that management thinks have little chance of profitability. The proceedings will also swap a further US$3 billion of debts for equity, meaning WeWork should emerge from bankruptcy protection with a much less ugly balance sheet. And having filed for creditor protection it now has more leverage to persuade other landlords to cut rents at locations it wishes to keep.
WeWork has a large footprint in New York, Boston, San Francisco and London. Dozens of properties currently occupied by WeWork may be vacated, and a recession could yet worsen the real estate bloodbath. “The reality is large corporations globally are moving to a much more flexible approach to how they support their people,” IWG Chief Executive Officer Mark Dixon told investors in August. “They are moving towards hybrid working. And it's universal, and it's gathering pace.”
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