A WeWork sign on the Triangle building at 1550 Wewatta St., whose mirror-like facade reflects the sky. (Thomas Gounley/BusinessDen)
Bankrupt coworking firm WeWork is trimming its footprint at one downtown Denver location, and has a tentative deal with a landlord for reduced rent at another.
At the Triangle building at 1550 Wewatta St., WeWork will cease operating on the building’s first and fourth floors by the end of this month, a company spokesman told BusinessDen.
New York-based WeWork, which filed for Chapter 11 bankruptcy in November, will continue to operate on the building’s second and third floors. The spokesman didn’t address a question asking whether the change was part of a deal reached with the building’s landlord.
The Triangle building, completed in 2015 by East West Partners and sold to a German investment fund in 2017, was WeWork’s inaugural Denver location. It opened in April 2016.
On the other side of downtown, at 1700 Lincoln St., WeWork has two remaining floors in the Wells Fargo Center, down from five floors originally.
The 52-story office tower has been overseen by a court-appointed receiver, Judy Duran of CBRE, since August.
In a report filed in court on March 22, which covers activity at the building in February, Duran wrote that a tentative deal had been reached to restructure WeWork’s lease for the two floors. The term of the lease will remain the same, expiring at the end of March 2034.
“Effective March 1, 2024, through December 31, 2024, annual Base Rent will be reduced to $473,780 per year (total for floor 16 and 17),” Duran wrote. “The Annual Base Rent will increase by 2.5% January 1st thereafter. WeWork will pay $15 PSF NNN. A profit share agreement will be implemented as well. The terms are still being finalized and will be sent to KeyBank for approval.”
KeyBank is the building’s special servicer. The 1.2-million-square-foot Wells Fargo Center building is 27.6 percent vacant, Duran said in the report.
WeWork has been paying closer to $30 a square foot, a source told BusinessDen, meaning the $15 figure would amount to an approximately 50% percent drop in rent. That doesn’t account for the company’s share of building expenses, which are paid by tenants on triple-net leases.
As of mid-2019, WeWork had leased some 850,000 square feet across a dozen Denver buildings. But the company ultimately never opened several planned locations, and in 2021 it closed three that did get up and running. Another closed last year.
A BusinessDen analysis last August, after downsizing at both the Wells Fargo Center and Tabor Center, found the company still operated in about 300,000 square feet across five Denver buildings, although the reduction in space at the Triangle building decreases that figure further.
WeWork also has one location in Boulder.
WeWork said in a statement earlier this week that it has completed lease restructuring efforts for 90% of its approximately 500 locations.
About 150 leases are being amended, and another 150 have terms the company doesn’t see a need to change, WeWork said. The company said it is rejecting leases or negotiating building exits for another 150 locations.
WeWork said it expects to exit bankruptcy by the end of May.
A WeWork sign on the Triangle building at 1550 Wewatta St., whose mirror-like facade reflects the sky. (Thomas Gounley/BusinessDen)
Bankrupt coworking firm WeWork is trimming its footprint at one downtown Denver location, and has a tentative deal with a landlord for reduced rent at another.
At the Triangle building at 1550 Wewatta St., WeWork will cease operating on the building’s first and fourth floors by the end of this month, a company spokesman told BusinessDen.
New York-based WeWork, which filed for Chapter 11 bankruptcy in November, will continue to operate on the building’s second and third floors. The spokesman didn’t address a question asking whether the change was part of a deal reached with the building’s landlord.
The Triangle building, completed in 2015 by East West Partners and sold to a German investment fund in 2017, was WeWork’s inaugural Denver location. It opened in April 2016.
On the other side of downtown, at 1700 Lincoln St., WeWork has two remaining floors in the Wells Fargo Center, down from five floors originally.
The 52-story office tower has been overseen by a court-appointed receiver, Judy Duran of CBRE, since August.
In a report filed in court on March 22, which covers activity at the building in February, Duran wrote that a tentative deal had been reached to restructure WeWork’s lease for the two floors. The term of the lease will remain the same, expiring at the end of March 2034.
“Effective March 1, 2024, through December 31, 2024, annual Base Rent will be reduced to $473,780 per year (total for floor 16 and 17),” Duran wrote. “The Annual Base Rent will increase by 2.5% January 1st thereafter. WeWork will pay $15 PSF NNN. A profit share agreement will be implemented as well. The terms are still being finalized and will be sent to KeyBank for approval.”
KeyBank is the building’s special servicer. The 1.2-million-square-foot Wells Fargo Center building is 27.6 percent vacant, Duran said in the report.
WeWork has been paying closer to $30 a square foot, a source told BusinessDen, meaning the $15 figure would amount to an approximately 50% percent drop in rent. That doesn’t account for the company’s share of building expenses, which are paid by tenants on triple-net leases.
As of mid-2019, WeWork had leased some 850,000 square feet across a dozen Denver buildings. But the company ultimately never opened several planned locations, and in 2021 it closed three that did get up and running. Another closed last year.
A BusinessDen analysis last August, after downsizing at both the Wells Fargo Center and Tabor Center, found the company still operated in about 300,000 square feet across five Denver buildings, although the reduction in space at the Triangle building decreases that figure further.
WeWork also has one location in Boulder.
WeWork said in a statement earlier this week that it has completed lease restructuring efforts for 90% of its approximately 500 locations.
About 150 leases are being amended, and another 150 have terms the company doesn’t see a need to change, WeWork said. The company said it is rejecting leases or negotiating building exits for another 150 locations.
WeWork said it expects to exit bankruptcy by the end of May.
