Why You Should Care About WeWork’s Bankruptcy

By: Anneken Tappe · November 09, 2023 · Reading Time: 2 minutes

WeWork’s Chapter 11

Between the rise of remote work, and rapid increase in interest rates, America’s office landlords were already facing an uphill battle. Now WeWork’s bankruptcy is adding to their struggles.

The coworking company was at one point the largest office tenant in New York, but this week, it filed for bankruptcy. For office landlords, this means more trouble ahead.

Closing Down Offices

WeWork’s office space spans some 600 office buildings throughout the U.S. In New York, its leases are concentrated in older Class B properties, which tend to be less desirable for new tenants, adding more pressure to the landlords who would want to find new renters after WeWork moves out.

As part of its bankruptcy, WeWork hopes to cancel at least 40 leases in the city.

The Ripple Effect

WeWork’s bankruptcy, and the potential repercussions for commercial landlords, may have a knock-on effect for the financial system, as many office loans sit on bank balance sheets. If there’s trouble ahead, lending conditions could tighten.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

TLS 1.2 Encrypted
Equal Housing Lender