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| WeWork Wants a Rent Break. Its Customers Do, Too. | WeWork Wants a Rent Break. Its Customers Do, Too. |
| (about 16 hours later) | |
| WeWork, the office space giant that was struggling even before the coronavirus shut down much of the economy, is asking landlords for a break on its huge rent bill as it tries to survive the pandemic. | WeWork, the office space giant that was struggling even before the coronavirus shut down much of the economy, is asking landlords for a break on its huge rent bill as it tries to survive the pandemic. |
| Some of the company’s small-business customers are also seeking relief on the rent they owe. But they say WeWork has been unwilling to cut them much slack as they grapple with plunging revenues and stay-at-home orders that prevent them from using the company’s sleek spaces. | Some of the company’s small-business customers are also seeking relief on the rent they owe. But they say WeWork has been unwilling to cut them much slack as they grapple with plunging revenues and stay-at-home orders that prevent them from using the company’s sleek spaces. |
| Klint Briney, who runs a marketing company in Los Angeles, was disappointed that WeWork offered only to defer one month’s rent. Because much of his business comes from live events, his revenue is a small fraction of what it was a year ago. | Klint Briney, who runs a marketing company in Los Angeles, was disappointed that WeWork offered only to defer one month’s rent. Because much of his business comes from live events, his revenue is a small fraction of what it was a year ago. |
| “Something that was a legitimate offer, I certainly would have entertained,” he said. “What they offered was a slap in the face.” | “Something that was a legitimate offer, I certainly would have entertained,” he said. “What they offered was a slap in the face.” |
| So, Mr. Briney is doing to WeWork what the company is doing to some of its landlords: He is not paying rent for April and May. | So, Mr. Briney is doing to WeWork what the company is doing to some of its landlords: He is not paying rent for April and May. |
| WeWork’s chief executive, Sandeep Mathrani, acknowledged withholding April and May rent payments to some of its landlords in an interview with CNBC last week. | WeWork’s chief executive, Sandeep Mathrani, acknowledged withholding April and May rent payments to some of its landlords in an interview with CNBC last week. |
| The tension between WeWork, its landlords and its customers highlights the problems gripping the market for office space, a huge part of the economies of big cities. In the coming months, many tenants will be unable or unwilling to pay their rent. And landlords will have to decide whether to grant them relief, wait for them to make good on their arrears or seek to evict them. Banks and investors who lent money to property owners will face similar choices. | The tension between WeWork, its landlords and its customers highlights the problems gripping the market for office space, a huge part of the economies of big cities. In the coming months, many tenants will be unable or unwilling to pay their rent. And landlords will have to decide whether to grant them relief, wait for them to make good on their arrears or seek to evict them. Banks and investors who lent money to property owners will face similar choices. |
| WeWork is a huge tenant — the largest private renter of New York office space — and has thousands of its own tenants. The company rents space to freelancers, start-ups, small businesses and large companies like Amazon. If it provided significant relief to its customers, it could help a crucial segment of the economy bear the costs of the pandemic and lockdowns. | WeWork is a huge tenant — the largest private renter of New York office space — and has thousands of its own tenants. The company rents space to freelancers, start-ups, small businesses and large companies like Amazon. If it provided significant relief to its customers, it could help a crucial segment of the economy bear the costs of the pandemic and lockdowns. |
| But WeWork may not be in a position to be generous. | But WeWork may not be in a position to be generous. |
| The company nearly collapsed last year after investors balked at buying its shares in an initial public offering — and it is still burning through cash. | The company nearly collapsed last year after investors balked at buying its shares in an initial public offering — and it is still burning through cash. |
| SoftBank, the Japanese conglomerate that had fueled WeWork’s rapid growth, rescued the company and promised to keep plowing new money into the company. But SoftBank, which on Monday reported a $12.7 billion loss in the fiscal year that ended March 31, may no longer have the appetite to be WeWork’s financial savior. It has walked away from an offer to buy up to $3 billion of stock from existing shareholders, including Adam Neumann, WeWork’s co-founder. That move allows SoftBank to withhold $1.1 billion of debt financing from the company. | SoftBank, the Japanese conglomerate that had fueled WeWork’s rapid growth, rescued the company and promised to keep plowing new money into the company. But SoftBank, which on Monday reported a $12.7 billion loss in the fiscal year that ended March 31, may no longer have the appetite to be WeWork’s financial savior. It has walked away from an offer to buy up to $3 billion of stock from existing shareholders, including Adam Neumann, WeWork’s co-founder. That move allows SoftBank to withhold $1.1 billion of debt financing from the company. |
| Masayoshi Son, SoftBank’s chief executive, seemed to take a dim view of WeWork’s prospects on a call with analysts and investors on Monday. Speaking through an interpreter, Mr. Son said some companies in which SoftBank had invested had a good chance of “going through” the coronavirus crisis but said WeWork was an “exception.” He suggested that businesses might be reluctant to sign long-term office leases after the pandemic and might instead opt for shorter-term agreements at WeWork locations. | Masayoshi Son, SoftBank’s chief executive, seemed to take a dim view of WeWork’s prospects on a call with analysts and investors on Monday. Speaking through an interpreter, Mr. Son said some companies in which SoftBank had invested had a good chance of “going through” the coronavirus crisis but said WeWork was an “exception.” He suggested that businesses might be reluctant to sign long-term office leases after the pandemic and might instead opt for shorter-term agreements at WeWork locations. |
| But a SoftBank executive who serves as WeWork’s executive chairman, Marcelo Claure, said later on Twitter that SoftBank and Mr. Son were confident of the company’s ability to weather the pandemic. | But a SoftBank executive who serves as WeWork’s executive chairman, Marcelo Claure, said later on Twitter that SoftBank and Mr. Son were confident of the company’s ability to weather the pandemic. |
| WeWork may have advantages, including leverage to get better deals from property owners. The company occupies so much space that some building owners would be hard pressed to find other renters if WeWork left, especially in the next several months. | WeWork may have advantages, including leverage to get better deals from property owners. The company occupies so much space that some building owners would be hard pressed to find other renters if WeWork left, especially in the next several months. |
| “We’ve paid our rent in over 80 percent of our locations in April and May,” Mr. Mathrani told CNBC. “We’re in discussions with our landlords in a friendly way, and we intend to make whole on our entire obligation.” | “We’ve paid our rent in over 80 percent of our locations in April and May,” Mr. Mathrani told CNBC. “We’re in discussions with our landlords in a friendly way, and we intend to make whole on our entire obligation.” |
| But even if WeWork can get better terms, the company faces daunting odds. The pandemic may have undermined its business model, which rested on putting lots of people into communal spaces. Customers may shun highly trafficked offices and, after working from home for weeks, may decide they can keep doing so at least until the economy and their fortunes recover. | But even if WeWork can get better terms, the company faces daunting odds. The pandemic may have undermined its business model, which rested on putting lots of people into communal spaces. Customers may shun highly trafficked offices and, after working from home for weeks, may decide they can keep doing so at least until the economy and their fortunes recover. |
| WeWork has said it is overhauling its spaces in response to the pandemic. It is spacing out customers more. And Mr. Mathrani told CNBC that demand for WeWork’s office space could increase if more companies decided they need room to spread out their employees. | WeWork has said it is overhauling its spaces in response to the pandemic. It is spacing out customers more. And Mr. Mathrani told CNBC that demand for WeWork’s office space could increase if more companies decided they need room to spread out their employees. |
| But WeWork’s reputation could suffer if many customers think it did not live up to its ideals. Mr. Neumann and other executives have long argued that WeWork is far more than a provider of office space. Its locations, so the pitch went, offer customers a place to form supportive communities that will promote entrepreneurship and give work meaning. That’s why some customers expected WeWork to cut or waive rents while they have been forbidden by local officials to go to offices. | But WeWork’s reputation could suffer if many customers think it did not live up to its ideals. Mr. Neumann and other executives have long argued that WeWork is far more than a provider of office space. Its locations, so the pitch went, offer customers a place to form supportive communities that will promote entrepreneurship and give work meaning. That’s why some customers expected WeWork to cut or waive rents while they have been forbidden by local officials to go to offices. |
| Stacey Brook helps advise high school students on writing essays for college admissions. She ran her business, which is not considered an essential service, out of a small office at a WeWork in Manhattan when New York told people to stay at home. The uncertainty over college attendance has reduced demand for her service. In addition, her partner takes medicine that suppresses his immune system, making him particularly vulnerable to the coronavirus. | Stacey Brook helps advise high school students on writing essays for college admissions. She ran her business, which is not considered an essential service, out of a small office at a WeWork in Manhattan when New York told people to stay at home. The uncertainty over college attendance has reduced demand for her service. In addition, her partner takes medicine that suppresses his immune system, making him particularly vulnerable to the coronavirus. |
| As a result, Ms. Brook wanted to end her rental agreement. WeWork offered to defer one month’s rent, but told her that if she broke the contract, she’d owe nearly $19,000 for the remaining 12 months. | As a result, Ms. Brook wanted to end her rental agreement. WeWork offered to defer one month’s rent, but told her that if she broke the contract, she’d owe nearly $19,000 for the remaining 12 months. |
| Updated June 24, 2020 | |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| “We understand the contract breakage fee is substantial and doesn’t help ease the stress of the global pandemic — please bear with us during this time as we work to come up with the best solutions for our members,” a WeWork employee wrote to Ms. Brook. | “We understand the contract breakage fee is substantial and doesn’t help ease the stress of the global pandemic — please bear with us during this time as we work to come up with the best solutions for our members,” a WeWork employee wrote to Ms. Brook. |
| Ms. Brook said she felt that WeWork had fallen short of its values, particularly its claim that it helps small businesses. “We are operating with much less room for error than the company that houses us,” she said. “It’s infuriating.” | Ms. Brook said she felt that WeWork had fallen short of its values, particularly its claim that it helps small businesses. “We are operating with much less room for error than the company that houses us,” she said. “It’s infuriating.” |
| Mr. Mathrani, speaking to CNBC, said WeWork had collected “over 70 percent” of April rents. WeWork declined to say how many customers had been granted a deferral or some other relief. | Mr. Mathrani, speaking to CNBC, said WeWork had collected “over 70 percent” of April rents. WeWork declined to say how many customers had been granted a deferral or some other relief. |
| “WeWork has been working closely with individual member businesses to offer mutually beneficial solutions, and ultimately has been able to provide concessions to an overwhelming majority of those that have requested one,” the company said in a statement. | “WeWork has been working closely with individual member businesses to offer mutually beneficial solutions, and ultimately has been able to provide concessions to an overwhelming majority of those that have requested one,” the company said in a statement. |
| WeWork has kept its locations open during the lockdowns, contending that some of its services, like mail, shipping, security and storage, are among those government agencies have classified as essential. | WeWork has kept its locations open during the lockdowns, contending that some of its services, like mail, shipping, security and storage, are among those government agencies have classified as essential. |
| But a lawyer representing 80 WeWork customers, including Ms. Brook, says the pandemic and the lockdowns provide legal grounds for freeing customers from their contracts. The lawyer, Jim Walden, a managing partner of Walden Macht & Haran, is pressing WeWork to stop charging members monthly fees. He has asserted that WeWork’s customers can get out of their agreements under a provision of New York state law that says an event that is “virtually cataclysmic” and “wholly unforeseeable” renders the contract void. | But a lawyer representing 80 WeWork customers, including Ms. Brook, says the pandemic and the lockdowns provide legal grounds for freeing customers from their contracts. The lawyer, Jim Walden, a managing partner of Walden Macht & Haran, is pressing WeWork to stop charging members monthly fees. He has asserted that WeWork’s customers can get out of their agreements under a provision of New York state law that says an event that is “virtually cataclysmic” and “wholly unforeseeable” renders the contract void. |
| Mr. Briney, the owner of the marketing company in Los Angeles, said he hadn’t made recent payments because he was hoping that WeWork might offer more than a deferral of one month’s rent. | Mr. Briney, the owner of the marketing company in Los Angeles, said he hadn’t made recent payments because he was hoping that WeWork might offer more than a deferral of one month’s rent. |
| “It is widely known that WeWork is skipping rent payments on its buildings,” he said, “They are a global company and using that leverage. Why not pass that down to the fabric of who rents from you?” | “It is widely known that WeWork is skipping rent payments on its buildings,” he said, “They are a global company and using that leverage. Why not pass that down to the fabric of who rents from you?” |