Economy & Economic Development November 7, 2023 4:53:41 pm

WeWork files bankruptcy, but Boulder location appears safe

WeWork apparently will continue to operate out of its Boulder office. Lucas High/BizWest

By Lucas High

BOULDER — Co-working giant WeWork Inc. (NYSE: WE), once a darling of investors that promised to approach commercial real estate through the lens of a technology company, filed for Chapter 11 bankruptcy in New Jersey on Monday but does not appear to have immediate aims to jettison its Boulder operations.

While 2755 Canyon Blvd WW Tenant LLC, a holding company created by WeWork to oversee its Boulder co-working space at 2755 Canyon Blvd. is included as one the entities seeking bankruptcy protection, the Boulder space does not feature on WeWork’s list of leases it hopes the court will give it permission to reject.

Two Denver WeWork locations — 2420 17th St. and 3601 Walnut St. — were on the list of nearly 70 leases out of which WeWork wants to wriggle.

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“During this period, WeWork will further rationalize its commercial office lease portfolio while focusing on business continuity and delivering best-in-class services to its members, as global operations are expected to continue as usual,” the company said in a statement. “… WeWork has a deliberate and value maximizing lease rejection plan that is expected to position the company for operational and financial success. As part of today’s filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational and all affected members have received advanced notice.”

New York-based WeWork, founded in 2010 by Adam Neumann and several partners, had $15.1 billion in assets and liabilities that total $18.7 billion as of June 30, 2023, according to its bankruptcy filing.

WeWork came to Boulder in 2019 when it leased the bottom three floors — more than 30,000 square feet — of the four-story Canyon 28 office building, developed in 2017 by Lou DellaCava of Boulder-based LJD Enterprises Inc.

Boulder-based commercial real estate firm Gibbons-White served as the broker of the 12-year lease.

“Boulder is known globally as a hub of innovation and entrepreneurship. From the University of Colorado, to startups, to major global companies, the mix of talent combined with an amazing lifestyle means Boulder is a place that people want to be,” Nathan Lenahan, WeWork’s Mountain West general manager, said in a prepared statement when the lease deal was announced four years ago.

The Boulder operation was WeWork’s first in Colorado outside of Denver, where the company has significantly reduced its footprint in recent years.

“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” WeWork CEO David Tolley said in a statement this week. “We defined a new category of working, and these steps will enable us to remain the global leader in flexible work.”

WeWork’s collapse is merely the latest domino to fall on an increasingly shaky commercial real estate playing field.

Co-working spaces have proven little more immune than traditional offices to the post-COVID-19 shift in hybrid and work-from-home preferences.

Vacancy rates for offices in downtown Boulder — the Canyon 28 building sits on the edge of this district — have hovered around 30% this year, according to data from local brokerage Dean Callan & Co.