WeWork To Close Coworking Space In Prime US REIT’s Emeryville Complex
USA – Singapore-listed Prime US REIT is in talks with lessee WeWork on how the latter will resolve its lease obligations at Tower 1 of Emeryville, a Grade A office complex in California, reported The Business Times on Monday morning (13 September, SGT), citing a Singapore bourse filing published on the same day.
The manager of Prime US REIT revealed that the coworking space operator presently leases 56,977 sq ft of office space at the commercial property. WeWork also contributes approximately 2.5 percent of the trust’s cash rental income as of 30 June 2021. In June, the tenant approached the REIT and requested to restructure its lease.
As mentioned in an announcement made by Prime US REIT in June 2021, WeWork has granted the trust with security in relation to the lease and this comprises a mix of safeguards. Also, to the extent the counterparty fulfils its obligations, such safeguards cover the occupant’s monthly lease obligations of a maximum of until the end of 2022.
Given the lease safeguards, Prime US REIT’s manager does not expect that the closure of WeWork’s coworking space would have any impact on the distribution per unit (DPU) of the trust for the present fiscal year.
Prime US REIT’s announcement comes after the San Francisco Business Times reported last week that WeWork is poised to close its coworking space at Emeryville at the end of September 2021, with a company representative corroborating the move.
Notably, WeWork occupies 3 office levels at Emeryville, and its clients there were offered “white-glove moving services” to relocate to one of the coworking space operator’s 3 nearby branches, namely 2120 University Avenue in Berkeley, as well as 1111 Broadway and 2201 Broadway in Oakland.
WeWork refused to comment on the particulars of its lease at Emeryville, and whether it intends to sublet any of the 56,977 sq ft it is been occupying there since April 2019. The coworking space operator also refused to disclose the current numbers of members at its premises there.