The troubled shared workspace company WeWork is backing out of plans to open a coworking space in Baltimore’s Harbor Point, as officials say they will no longer lease 69,000 square feet of the Wills Wharf building to the company.
Armada Hoffler Properties, which is the developer for the 325,000-square-foot Wills Wharf mixed-use building, announced that that WeWork will no longer lease the top two office floors of the building.
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“With its prime waterfront location in Harbor Point, we are in active negotiations to lease the balance of the building, inclusive of the 69,000 square feet that WeWork was to occupy,” said Louis Haddad, president and CEO of Armada Hoffler Properties, in a statement. “We appreciate the cooperation and collaboration with WeWork in finding an optimal business solution at this location.”
Dave McLaughlin, WeWork’s general manager for the Atlantic, said in a statement that the company is “grateful to Armada Hoffler Properties for their ongoing partnership throughout this process.”
The cancellation of the project comes as WeWork has seen it business go through drastic changes after incurring losses of nearly $2 billion in 2018, according to a New York Times report.
Back in 2018, when WeWork was still touting itself as the largest private office tenant in Manhattan, the company announced it would open its first shared office space in Baltimore at the Wills Wharf building. At the time, the company said the space would have room for more than 1,100 members.
It was a small part of a larger effort to build the new Harbor Point neighborhood in downtown Baltimore, a 27-acre redevelopment of what was once a heavy industrial site that has seen the addition of apartments and office buildings in recent years.
However, attempts by WeWork to raise more capital via an initial public offering were scrapped amid concerns about the company’s financial standing and corporate structure, leading SoftBank to bail out WeWork to the tune of $5 billion. Since the bailout, The New York Times has reported that Softbank has looked to narrow WeWork’s scope and focus its energy on major markets like in New York City and San Francisco.
Co-working spaces like WeWork also could pose problems in the coronavirus era. Employers and workers are rethinking office space to help minimize the risk of spreading COVID-19, such as staggering shifts, increasing telework and closing or restricting common areas.
Baltimore Sun reporter Lorraine Mirabella contributed to this article.