The dissolution of the American company WeWork, whose bankruptcy is once again feared, could have “significant” consequences for the already fragile office market in Montreal and the rest of Quebec.
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“This situation could certainly have a negative impact on the market,” estimates Mathieu Tournament, assistant vice president of the real estate company Colliers. Closing all downtown locations at the same time would be tantamount to simply closing a large headquarters in Montreal.”
Last week, the Wall Street Journal reported that the company specializing in the rental of workspaces, which has already entered into a cooperation with the real estate subsidiary of the Caisse de dépôt etplacement du Québec (Ivanhoé Cambridge), is preparing to file for bankruptcy.
Since then, WeWork shares, which had already escaped bankruptcy in 2019, have begun to fall sharply again on the New York Stock Exchange. This downward trend has been going on for years. The stock price has lost nearly $55, or 98% of its value, since January 2023.
The equivalent of Intact
WeWork’s presence here is smaller than in cities like New York, London, Paris and even Toronto, Mr. Tournament admits. However, he believes his presence is so significant that his eventual withdrawal from the Montreal ecosystem will leave its mark.
Mathieu Tournament, assistant vice-president of Colliers International, in Quebec. Photo courtesy of Cortez Design Visuals
WeWork currently operates four coworking spaces in Montreal, the largest of which (120,000 square feet) is located in the Dominion Square building on Sainte-Catherine Street West at the corner of Peel and Metcalfe Streets.
With the addition of its three additional offices, at Place Ville Marie, L’Avenue Tower and Saint-Antoine Ouest, near the Palais des Congrès, WeWork alone occupies almost 300,000 square meters of space in downtown Montreal (see table). .
For comparison, this corresponds to the area occupied by the headquarters of the insurance company Intact. The insurer occupies just over half of the 26-story (500,000 ft2) high-rise of the same name, the former 2020 University, on the corner of Robert-Bourassa and De Maisonneuve Ouest.
Owner at risk
According to the Colliers expert, negative absorption of such office space, equivalent to 1.3% to 1.5% of downtown Montreal’s real estate stock, could only have a negative impact on the building’s earnings for affected owners.
This is the case, among others, with Canpro Investments, the owner of the Dominion Square building. No less than 120,000 square meters are used by WeWork. This also applies to Ivanhoé Cambridge, a subsidiary of CDPQ, owner of Place Ville Marie. One of its tenants, WeWork, occupies 75,000 square feet.
The American company is in serious financial difficulties and is also a tenant of several of Ivanhoé Cambridge’s other towers. If the latter refused, for competitive reasons, to disclose the leases that bind it to WeWork, it confirms that they concern several of its buildings in the United States, in particular in New York, Chicago, San Francisco and Austin.
-With the contribution of Sylvain Larocque
WeWork presence in Montreal
Offices, lounge area
- 1010, Sainte-Catherine West, 120,000 square feet.
- 1275 Avenue des Canadiens, 80,000 square feet.
- 3, Place Ville Marie, 75,000 square feet.
- 415, Saint-Antoine, 10,000 square feet.
A total of 285,000 feet2
Source: Colliers International
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