WeWork and coworking peers threaten to cast huge vacancies into market - Business Insider

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As WeWork and flex-space rivals stumble, 18 million square feet of space in NYC is at risk. Here's what that means for the real-estate market.

could cast millions of square feet onto the market at a time when tenant appetite for new space has been diminished by the crisis and the economic damage the pandemic has inflicted on commerce.

"If we were just talking pre-Covid, I would say that the impact of coworking vacancies on the market would be huge," said Jeffrey Peck, a vice chairman at the real-estate services firm Savills. "Post-Covid, it could be percentage points on top of what we already believe is going to be an even bigger number."with WeWork initiating another round of layoffs to cut costs

The availability rate in Manhattan, a calculation that includes present vacancy and spaces that are expected to become empty in the coming months, was 11.8% at the end of the first quarter, according to Newmark data. Average asking rents were a record $81.

"As part of our plan to seek profitable growth, we are conducting an in-depth review of operations and assets globally in order to rightsize the business and optimize our real estate portfolio," a WeWork spokeswoman, Nicole Sizemore, said in a statement. "As we work through this process, we are working with industry partners where appropriate."WeWork and its peers played a large role in pushing up the office market in recent years.

 

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