WeWork Deals for More Than 40K SF of Boston Space Fall Through
Around the city of Boston, it feels like you can’t turn a corner without seeing a building that offers flexible coworking space – and it is usually owned and operated by WeWork. Indeed, the Manhattan-based firm has quickly made its presence known in Boston, and it feels like the company has been snapping up additional office space at a dizzying rate. However, with the falling through of its proposed IPO and resignation of its CEO, WeWork appears to have hit a bit of a stumbling block – and two potential deals have fallen through recently, prompting some to wonder if the company has hit its saturation point in the city.
Stay tuned to Boston City Properties for updates regarding the office coworking market, which tends to be dominated by two big players: WeWork and Industrious. In the meantime, we can bring you up to speed regarding the latest two deals to have fallen through. The company had lately been in advanced talks with Northwood Investors regarding 230 Congress Street and Faros Properties regarding 14 Beacon Street. However, negotiations for leasing what would become coworking space at those locations fell through in mid-October as WeWork withdrew its IPO, leaving potential partners uncertain about the future.
The space that WeWork had been eyeing at 14 Beacon Street was tentatively going to be designed following the company’s HQ by WeWork model. This model differs from the firm’s better-known coworking space model in that while it features WeWork-designed offices and spaces, the space is designed solely for one tenant. As a result, tenants do not have to share space with others. To make this happen, WeWork wanted to acquire as much space at 15 Beacon as possible. All told, it was looking at more than 10,000 square feet across the fourth, seventh and eighth floors of the building, which was sold by the American Congregational Association in 2017 to Faros Properties.
WeWork had also been in negotiations regarding the acquisition of more than 31,000 square feet of office space at 230 Congress Street. The space was available across all of the seventh floor and into parts of the sixth and 10th floors of that building. It is not clear whether this space would have been set up more like the traditional WeWork coworking space design in which multiple startups and other firms share space to defray costs and for extra flexibility.
Currently, with around 1.6 million square feet of Boston office space in its portfolio, WeWork is the second largest tenant in the city. Despite this recent setback, the company appears to still be working feverishly to acquire yet more space across the city, so there is little doubt that it will soon surpass Fidelity as the largest tenant in Boston. Still, the company will likely have to allow the dust to settle from its failed potential IPO and the resignation of Adam Neumann, its president and CEO.
For those who are seeking flexible office space in the city of Boston, these latest developments suggest that while there may be a slight hiccup in the short-term in terms of availability, WeWork is certain to continue its expansion in the city. This means, of course, that many new types of flexible coworking space will be opening up in the months to come. It’s also important to note that WeWork is far from the only player in this space. Industrious also has a large footprint in the city and is worth considering. If you need assistance regarding leasing coworking space in Boston or need to lease traditional space for your business, contact Boston City Properties today.