How founders are negotiating with WeWork in the middle of the pandemic - Business Insider

out of a Washington WeWork, with another office in Minneapolis run by Industrious. That office company offered to charge $250 monthly to hold the space and waive the $2,300 monthly rent, and they could reevaluate after 80 days – earning Solheim's "lifelong loyalty."

Now, Solheim's weighing declining to pay WeWork – but he's worried about the legal and credit risk of doing that. Solheim may opt to pay a $5,000 fee to get out of the WeWork lease instead. "Typically, force majeure provisions don't excuse the payment of rent," said Stephanie Friese, an Atlanta attorney with Chamberlain Hrdlicka who specializes in commercial real estate issues.

The typical protections afforded renters are also unlikely to apply, Friese said, due to a provision in WeWork's membership agreement that specifically defines the relationship as a service, rather than tenancy: The service provider framing also helps WeWork avoid some of the obligations typical landlords face, especially if state or local governments don't consider membership fees when announcing mandatory rent or mortgage relief measures.

Where WeWork would fit in those discussions is unclear, but Friese agreed that the company's decision to keep every one of its North American locations open during the pandemic could open it up to legal scrutiny.The CEO of another venture-backed flexible office operator, Knotel, has said one-third of its members have, in what could be a proxy for how flexible-space members are seeking to negotiate.

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