Despite coworking giant WeWork’s bankruptcy filing this week, its two Las Vegas locations remain operational.
WeWork is seeking Chapter 11 bankruptcy protection in a move that it says will help it reorganize and strengthen its financial position. While the company will likely close underperforming locations, it’s unclear at this time if that will impact its Las Vegas operations, which include two locations totalling just over 138,000 square feet.
“Our spaces in Las Vegas are open and operational,” a WeWork spokesperson said in an emailed statement. “We remain committed to delivering an exceptional experience and innovative flexible workspace solutions for our members.”
WeWork declined to disclose how well its Las Vegas locations were performing and occupancy figures.
WeWork has a location in Two Summerlin, with about 47,000 square feet, and another at Town Square, with roughly 91,000 square feet, according to CoStar Group, a real estate data and analytics company. CoStar estimates the 138,000 square feet of WeWork space makes up just 0.2 percent of Las Vegas’ office inventory.
In a news release, WeWork said it will undergo a comprehensive financial reorganization and will “further rationalize its commercial office lease portfolio.” A spokesperson said this includes reducing rent expenses, exploring alternative lease options and investing more in the company’s strongest assets.
Overall, the Las Vegas office market had a direct vacancy rate of 10.9 percent in the third quarter of 2023, according to a report from CBRE Group Inc.
Dana Berggren, owner of The Coop, which operates two coworking spaces in Las Vegas, said she wasn’t very surprised by WeWork’s bankrupty because of its rapid expansion since its founding in 2010 and its presence in high-price markets. Her company occupies 24,000 square feet of office space in the Las Vegas market.
“Locations where WeWork might have been, especially in these larger metropolitan cities, New York, (Los Angeles), San Francisco, Washington D.C., Chicago … these are class-A office projects which command a high rent, so in turn, you have to charge that much more,” she said.
Berggren said she sees positive momentum for the coworking market in Las Vegas because of the city’s growing population and a continued demand for workers to have flexible work space. She said the business model of coworking spaces can quickly change from high to low, and overall this business model is at the “whims” of the economy, because when the economy slows, companies and individuals often cut back on costs put toward coworking spaces.
Even though WeWork is a competitor to The Coop, Berggren hopes the company will be able to smooth out its operations, since WeWork has become the brand name for the coworking business model.
“WeWork really put coworking on the map and made it a term that everybody knows,” she said. “I hope for WeWork’s success, because I think their success begets all of our success.”