WeWork Files for Chapter 11 Bankruptcy

Amid a historical downturn in the office market, WeWork has filed for Chapter 11 bankruptcy in the state of New Jersey on Monday. In the filing, they seek court approval of rejection for 69 commercial real-estate leases they say are underperforming. Over half of these leases are in New York.

Chief Executive David Tolley says 90% of the company’s lenders will convert their debt into equity, eliminating $3 billion in debt. Today WeWork has said most existing shares will be deemed worthless as part of the reorganization plan that is proposed, besides shares held by SoftBank, who holds over 50% of the company’s common shares. Instead, SoftBank will cancel its existing debts and retain the existing shares, announced WeWork. According to court papers, subsidiaries of SoftBank’s vision fund owns approximately 56% of the company’s shares outstanding.

WeWork was valued at $47 billion during its peak, and now faces the harsh consequences of rapid, excessive expansion leaving the company with an abundance of unprofitable locations. Hundreds of long-term office leases were signed by the office-space provider at the top of the market in the late 2010’s. demand for desks fell while vacancies reached historical highs during the pandemic, and WeWork remained on the hook for billions of dollars of rent payments to landlords. Losses totaled $16 billion in June, as the company churned through all the money raised from investors and lenders over the past decade.

Under co-founder Adam Neumann, who was forced out of the company in 2019, WeWork had agreed to corporate lease guarantees that often amounted to years of rent, leaving the company with no easy way to ditch and renegotiate unprofitable leases. WeWork first signaled back in August that they were at high risk for going out of business due to the continuing decreased demand for office space and a higher then expected member loss. Despite amending or cancelling hundreds of leases since 2019, the high cost of rent and low occupancy remained a challenge and ultimately led to company to where they are today.

In 2019, at the peak value, the company was working towards a highly anticipated initial public offering, which was scrapped and WeWork went public years later at a fraction of the former $47 billion valuation. Under Neumann, WeWork had indulged in pricey diversions including investing in an artificial wave company, and large purchases such as a $63 million jet. During Neumann’s stewardship, the company lost a dollar for every dollar it took in for years. When Neumann was eventually forced out, WeWork attempted to clean up the management team and cut out side investments made by Neumann but the business model, which was vulnerable to any softening in the office market, ultimately failed.

WeWork subleased space to small tenants at high rates for as little as a month at a time. Customers could ditch their desks in the event of a downturn, and WeWork remained on the hook for rent payments. Because the office market derailed during the pandemic, and WeWork remained a bit too optimistic regarding the return to office measures companies would take, it is an opinion that WeWork did not work as aggressively as they could have earlier on to terminate or renegotiate ongoing leases.

40 of the 69 leases that WeWork has filed to reject are in New York. The company is also actively negotiating with over 400 landlords to amend existing leases. Tolley had previously told the Wall Steet Journal in in August that the company was seeking to avoid filing for chapter 11 by negotiating leases and reducing rental costs, but court papers field Tuesday exhibit that the company’s limited financial resources didn’t have the sufficient runway to complete and out of court rationalization of their lease portfolio. Locations outside of the US and Canada are not impacted by the bankruptcy filing.

Court documents state WeWork owns around $15 billion in assets and carries debts totaling $18.6 billion. The business reports they owe over $100 million in unpaid rent and lease termination fees to various real estate companies and property owners, some of which will dispute before the bankruptcy court.

Over 400 corporate entities affiliated with WeWork filed for bankruptcy as well on Monday, such as the individual subsidiaries WeWork established to run their properties around the world. WeWork has filed a motion to consolidate all of these cases to be managed as a single bankruptcy proceeding.

WeWork has a Tampa location at 501 East Kennedy Blvd., Tampa, FL 33602

Thank you for your interest. If you are in need of Appraisal & Valuation services in the West Central Florida Market, contact:

Mike Cliggitt, MAI, MRICS, CCIM

813.405.1705 | 863.661.1165 - Direct Lines

findvalue@cliggitt.com

Appraisal & Valuation Markets

Source: The Wall Street Journal

< Older Post

Newer Post >

SHARE CONTENT

Pasco County Approves Expansion of The Grove at Wesley Chapel

By • September 15, 2025

Pasco County commissioners have approved a major residential expansion at The Grove at Wesley Chapel, reinforcing the growth of one of the area’s most dynamic mixed-use destinations. On September 2, commissioners voted to allow developer Mark Gold to add 275 additional apartment units, nearly doubling the community’s multifamily component from 300 to 575 residences. Transforming a Former Retail Center Since acquiring The Grove in 2019, Gold has reshaped the once-struggling retail center into a thriving hub anchored by the Krate container park, boutique retailers, restaurants, and entertainment venues. The addition of new apartments is the latest step in evolving the 165-acre property into a fully integrated live-work-play environment. The approved plan calls for four-story apartment buildings, integrated pedestrian connections, and a new park. Residents will have direct access to Krate and surrounding businesses, further driving foot traffic and supporting small local enterprises. Commissioners described the project as a “classic mixed-use development” that responds to shifting consumer and tenant demand. Addressing Infrastructure and Traffic Concerns While Commissioner Jack Mariano voiced concerns over congestion along Oakley Boulevard, the main access road, other commissioners pointed to ongoing infrastructure improvements—including the widening of Old Pasco Road—as a sign that capacity is keeping pace with development. Additional pedestrian safety measures, such as new crosswalks and stop signs, were also included in the approval. Beyond Apartments: What’s Next for The Grove Although multifamily is taking the spotlight, questions remain about the use of The Grove’s 500,000 square feet of office entitlements, which have not yet been exercised. Commissioners emphasized the importance of adding employment opportunities to balance the project’s residential and retail growth. Gold has committed 1,000 square feet to a co-working space, reflecting demand from remote workers, and noted that hotel development is also underway, with letters of intent already signed for 120 rooms. Remaining entitlements include 50,000 square feet of retail and additional acreage along Old Pasco Road. A Model for Suburban Redevelopment The Grove’s continued evolution highlights a broader trend in the Tampa Bay area: the repositioning of aging retail centers into mixed-use, experience-driven destinations. As national retailers close and consumer behavior shifts, developers are integrating housing, entertainment, and co-working concepts to create sustainable long-term value. Commissioner Seth Weightman summed it up: “If it was ever an appropriate place in this county to have multifamily, this is it.” Source: Tampa Bay Times Thank you for your interest. Have questions regarding the local market? Navigate the Real Estate Market with confidence, and contact us at Cliggitt Valuation for your appraisal, consulting, and valuation needs today. Mike Cliggitt, MAI, MRICS, CCIM 813.405.1705 | 863.661.1165 - Direct Lines findvalue@cliggitt.com Appraisal & Valuation Markets Questions about our blog? Contact our Director of Sales & Marketing, Sydney Avolt. Sydney Avolt 727.403.7418 - Direct Line sydney@cliggitt.com

USF Trustee's Vote to Advance New Mixed-Use Fletcher District

By • September 9, 2025

The University of South Florida is moving forward with plans for a major mixed-use development on its Tampa campus known as the Fletcher District. Earlier this month, the university’s trustees approved the concept, and the proposal is now heading into a 90-day review process with the City of Tampa, Hillsborough County, and other local agencies. If approved by the Board of Governors in November, construction could begin as early as next year, with a second public hearing scheduled for December 10. The first phase of the Fletcher District will transform 27 acres into a combination of student and multifamily housing, a hotel and conference center, retail and dining options, green spaces, and a new academic building. Developers may also add an additional 20 acres of cottage-style family housing depending on early demand. The project is being structured as a public-private partnership, meaning USF’s direct financial role will be limited to the academic building and its share of infrastructure improvements. This site has been the focus of debate in recent years, as nearby residents previously pushed back on development proposals tied to land along Fletcher Avenue containing wetlands and sandhill preserves. In 2023, USF President Rhea Law designated the Forest Preserve as undevelopable and closed the university golf course adjacent to it. The current plan emphasizes preservation by including wildlife buffers, native vegetation restoration, and stormwater management systems designed to complement the natural environment. A full traffic analysis is also underway to address concerns about congestion along Fletcher Avenue. Reactions to the plan have been mixed. Student leaders see the Fletcher District as a “win-win” for the university and the broader community, citing the addition of much-needed housing and economic activity. Trustees have expressed optimism about the project’s potential to enhance campus life, with suggestions for public artwork and other landmarks in the green space. Local residents, however, remain concerned about flooding, runoff, and increased traffic in the surrounding neighborhoods. Some fear the project could overwhelm nearby infrastructure, though university officials say they are committed to working within all environmental and regulatory requirements. From a valuation perspective, the Fletcher District represents a significant shift in the development landscape around USF. Large-scale mixed-use projects of this nature often set new benchmarks for rent levels, absorption rates, and market expectations. The addition of multifamily housing, hospitality space, and retail could create ripple effects across adjacent submarkets, while the public-private structure introduces unique considerations for land valuation and long-term lease structures. As details continue to emerge, appraisers, investors, and property owners alike will be watching closely to see how this project influences growth and value in the area. Thank you for your interest. Have questions regarding the local market? Navigate the Real Estate Market with confidence, and contact us at Cliggitt Valuation for your appraisal, consulting, and valuation needs today. Mike Cliggitt, MAI, MRICS, CCIM 813.405.1705 | 863.661.1165 - Direct Lines findvalue@cliggitt.com Appraisal & Valuation Markets Questions about our blog? Contact our Director of Sales & Marketing, Sydney Avolt. Sydney Avolt 727.403.7418 - Direct Line sydney@cliggitt.com

A New Ballgame: Phillies Reignite Clearwater Development Plans

By cliggittvaluation • July 31, 2025

After a pause following last year’s hurricanes, the Philadelphia Phillies have resumed discussions with the City of Clearwater and Pinellas County to revisit long-term plans for upgrading their spring training complex. While no formal proposal has been submitted yet, early conversations signal a renewed interest in reaching a mutually beneficial agreement. City Manager Jennifer Poirrier, who is leading negotiations on behalf of Clearwater, says the team appears to be taking past community feedback seriously. “The Phillies organization definitely seems to have been listening,” Poirrier said, noting cautious optimism about progress. Pinellas County Administrator Barry Burton has also been involved in the meetings, given the likelihood that the Phillies will request funding from the county’s bed tax—a tax collected on short-term lodging stays. “Our role stems from the tourism impact the Phillies bring,” Burton said. “They’ve indicated that they may request funding from the bed tax, which is why we’re part of these conversations.” Back in 2019, the Phillies requested $40 million from the county’s bed tax to fund a nearly $80 million renovation of BayCare Ballpark and the nearby Carpenter Complex. That proposal didn’t gain traction, especially as the facilities—built in 2004—were significantly newer than others that had received funding, such as the Toronto Blue Jays’ Dunedin complex. Since then, project plans have remained fluid. In 2022, the Phillies unveiled a vision for a year-round player development hub, with cost estimates reaching $300 million. Later, they introduced a proposed mixed-use development—Ballpark Village—featuring residential units, retail, and dining space. The team purchased 13 acres just south of the complex for $22.5 million in November 2023 to support this expansion. Still, a more modest stadium-focused project, with a projected cost around $65 million, seems to be the first step forward. Poirrier confirmed that a scaled-down version is the likely direction in the near term but emphasized openness to more comprehensive plans in the future. “The U.S. 19 corridor holds enormous potential for economic growth,” she said. “We’re dreaming big and keeping our minds open.” The most recent meeting between city, county, and Phillies representatives took place on July 16, with another one scheduled for Friday. While Clearwater hasn’t re-engaged its former consulting firm CAA Icon—paid over $260,000 for its past role in negotiations—it may do so again down the line. From the Phillies’ side, key personnel in the discussions include Director of Florida Operations John Timberlake, BayCare Ballpark GM Doug Kemp, and CFO John Nickolas. Timberlake has not provided public comment on the meetings. City and county representatives, including Poirrier and Burton, are also planning a visit to Philadelphia in late August, a tradition where local officials are hosted by the team at Citizens Bank Park. These visits often include dinners, games, and conversations—but no negotiation meetings are currently scheduled for the trip. The Phillies have held their spring training in Clearwater since 1947 and have built deep ties to the community. In addition to their stadium investments, the team has made philanthropic contributions, including a $1 million donation toward hurricane relief last November. As of now, no final timeline has been established for the proposal or public funding request. “I think it’s safe to say everyone wants this finalized sooner rather than later,” Poirrier said, “but there’s no definitive timeframe just yet.” Source: Tampa Bay Times Thank you for your interest. Have questions regarding the local market? Navigate the Real Estate Market with confidence, and contact us at Cliggitt Valuation for your appraisal, consulting, and valuation needs today. Mike Cliggitt, MAI, MRICS, CCIM 813.405.1705 | 863.661.1165 - Direct Lines findvalue@cliggitt.com Appraisal & Valuation Markets Questions about our blog? Contact our Director of Sales & Marketing, Sydney Avolt. Sydney Avolt 727.403.7418 - Direct Line sydney@cliggitt.com