WeWork pulls out of Hyphen
The co-working firm has ditched plans to lease the entire 51,000 sq ft Mosley Street office block under development in Manchester, following talks with the building’s owner Boultbee Brooks Real Estate.
WeWork’s decision follows a review of its portfolio of co-working spaces – four of which are in Manchester – as it seeks to cut costs following two years of financial troubles compounded by shifting office market demand during the pandemic.
A statement from WeWork said: “As part of our ongoing global review to optimise our existing real estate portfolio, we have mutually agreed with Boultbee Brooks Real Estate to not proceed with the planned WeWork location at the Hyphen building.”
WeWork has been holding talks with Boultbee Brooks and its other landlords to try to renegotiate the terms of its existing and future leases. Place North West reported in 2018 that the US-based co-working firm was close to taking the entire 51,000 sq ft of office space at the mixed seven- and five-floor Hyphen.
The planned floor plates are varied with the largest on the seventh floor, spanning around 7,000 sq ft. The others vary between 3,000 sq ft and 5,000 sq ft, and there was also planned to be a café at ground floor level and a Vibe-branded gym at basement level.
The Hyphen scheme was originally expected to complete by summer 2017, but it has suffered delays. Boultbee Brooks had to replace the original fit-out contractor Styles & Wood last July – the firm later went into administration this February – with contractor Russells drafted in.
WeWork appointed consultancy Knight Frank in April to conduct a review of its five Manchester sites including Hyphen, and discussions with the other four landlords are ongoing. The other sites are 1 St Peter’s Square, where WeWork has 40,000 sq ft; the Hanover Building, where it has 91,000 sq ft; Dalton Place, where it has 65,000 sq ft, and No1 Spinningfields, where it has 90,000 sq ft.
It is understood that WeWork wants to keep those remaining sites open and is seeking to renegotiate the terms of its leases.
WeWork’s statement said: “Manchester is a great city for us and we remain committed to providing our current and prospective members with flexible workspace solutions and an exceptional experience across our four locations.”
Knight Frank said it could not comment on the negotiations, other than to say that they are ongoing and at an early stage.
WeWork, founded in 2010 by Adam and Rebekah Neumann and Miguel McKelvey, has been mired in controversy in recent years. The review of its co-working sites is the latest in its strategy to cut costs and “rightsize” the business, after it reported $1.25bn of losses in the third quarter last year and announced plans to lay off 2,400 staff globally.
Neumann resigned as chief executive last September the week before the company pulled the plug on plans to sell its shares on the stock market.
