KBRA Credit Profile Releases Special Alert: WeWork’s Future in Doubt—CMBS Exposure Reexamined

KBRA Credit Profile (KCP), a division of KBRA Analytics, has been closely following WeWork’s impact on CMBS credit quality since before the company’s scuttled IPO in 2019 and has identified 43 properties—$6.8 billion by allocated loan amount (ALA)—collateralizing 43 loans in 84 deals with exposure to a WeWork location. In addition, there are nine properties collateralizing nine loans contributed to 14 commercial real estate collateralized loan obligation (CRE CLO) securitizations with exposure to the coworking provider. KCP subscribers can access the list of CMBS loans here.

WeWork announced on August 8 during its Q2 2023 earnings call that “substantial doubt exists” as to the company’s ability to continue as a going concern, owing to its losses and weak liquidity position. Since 2019, WeWork has accelerated efforts to reduce leasing costs across its portfolio, amending more than 590 leases, and exiting some properties entirely, actions that have hobbled an already beleaguered office market reeling from the impacts of remote work. As of December 2022, the company’s total square footage in the U.S. and Canada was 18.3 million sf, down from 25 million sf in December 2020. KCP will continue to monitor developments regarding WeWork and report on potential implications for securitized loans.

Click here to view the full report.

Related Publications

• KCP WeWork Exposure Update–A Deeper Dive
• KCP Special Alert: WeWork CMBS Exposure

About KBRA Credit Profile

KBRA Credit Profile (KCP) is a research service and nothing herein or otherwise provided by KCP shall be construed as a rating. Any rating opinions, analysis, projections, observations, data or other items constituting part of any information provided or distributed by KCP or KBRA are and must be construed solely as statements of opinion and not statements of fact.

About KBRA Analytics

KBRA Analytics, LLC (KBRA Analytics) is our premier product platform for high quality data and advanced analytics. Our seasoned teams of industry specialists across each product provide unparalleled insight creating a foundation of deeper analysis and rapid discovery for users. KBRA Analytics is an affiliate of Kroll Bond Rating Agency, LLC (KBRA). KBRA is a full-service credit rating agency registered in the U.S., designated to provide structured finance ratings in Canada, and with credit rating affiliates registered in the EU and UK.

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