WeWork has filed for Chapter 11 bankruptcy protection, marking a stunning fall for the office-sharing company once seen as a Wall Street darling that promised to upend the way people went to work around the world.said it entered into a restructuring support agreement with the majority of its stakeholders to "drastically reduce" the company's debt while further evaluating WeWork's commercial office lease portfolio.
The specter of bankruptcy has hovered over WeWork for some time. In August, the New York company sounded the alarm over its ability to remain in business. But cracks had begun to emerge several years ago, not long after the company was valued as high as $47 billion. In September, when WeWork announced plans to renegotiate nearly all of its leases, Tolley noted that the company's lease liabilities accounted for more than two-thirds of its operating expenses for the second quarter of this year — remaining "too high" and "dramatically out of step with current market conditions."
WeWork's bankruptcy filing arrives at a time when leasing demand for office space is weak overall. The COVID-19 pandemic notably led to rising vacancies in office space as working from home became increasingly popular — and major U.S. markets, from New York to San Francisco, are still struggling to recover.
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