WeWork hit by rise in unpaid rent
ft.com
ft.com
> The company has been overwhelmed by the volume of calls and emails from businesses big and small that have moved to preserve their own cash as the coronavirus pandemic brings economic activity to a standstill, according to people involved in the matter.
> The group’s occupancy rate fell to roughly 64 per cent at the start of April, down from 79 per cent at the end of September. One person cautioned that the drop did not yet account for the full economic fallout of the crisis and the surge of cancellations the company was still girded for.
> WeWork has offered rent holidays to keep some clients and renegotiated monthly terms for others in an effort to retain as many of its more than 662,000 members as possible.
> However, many companies have decided against negotiating with WeWork and have either removed their credit card information from its payment system or declined to wire rent for the month, one of the people added, with lost income running into millions of dollars at least.
> Royal Caribbean, the cruise ship operator, was among the companies in recent days to notify WeWork that it would stop paying rent for the space it leases in Miami. The group, which suspended its global fleet in March, told the Financial Times on Monday that it was taking “decisive actions to protect the company’s financial and liquidity positions”.
> One employee said the company had taken its time to process termination requests and was attempting to “fight for every penny” as customers sought to cancel their leases.
> “Adam sold us on changing the world,” the employee said. “Sandeep has turned us into collection agents.”