New York City office landlords that have a track record of mitigating risk by filling their buildings with multiple tenants are breaking the rules for WeWork. The company has been operating in Manhattan since 2013, but it is now moving into an entire building at 1 Pierrepont Plaza on Manhattan’s Lower East Side. In a dozen or more other buildings, it occupies more than 50% of the space, according to The Real Deal. Properties with high WeWork occupancies trade at higher capitalisation rates than the overall market rate for similar buildings according to a 2018 Cushman & Wakefield study. WeWork guarantees just 11% of its overall lease obligations, the Wall Street Journal reported in June. Some of the city’s largest landlords have already begun to demand stronger guarantees from the company.
New York City office landlords that have a track record of mitigating risk by filling their buildings with multiple tenants are breaking the rules for WeWork. The flexible office operator has a total of five million sq ft in the city and occupies the entire rentable office space in at least five buildings. In a dozen or more other buildings, it occupies more than 50% of the space, according to The Real Deal. Properties with high WeWork occupancies trade at higher capitalisation rates than the overall market rate for similar buildings according to a 2018 Cushman & Wakefield study. WeWork guarantees just 11% of its overall lease obligations, the Wall Street Journal reported in June. Some of the city’s largest landlords have already begun to demand stronger guarantees from the company.