VINO11 Confirms WeWork's Exit from Building in Brazil

The fund had already obtained a court order in June due to the company's delayed payments.
The property had been fully leased to WeWork since its delivery in 2019.

Leandro Bousquet is the Head of Real Estate at Vinci Partners.

By: SiiLA News

10/11/2024

On the morning of Friday, October 11, FII VINO11 announced a vacancy agreement with WeWork. The company is expected to voluntarily vacate the property at Oscar Freire 585, located at Rua Oscar Freire, No. 585, in São Paulo, by October 31, 2024.

The fund had filed for a court order due to delayed payments since June, granting WeWork 15 days to rectify the situation or face eviction. Until the space's return is confirmed, the previously filed eviction action will remain suspended.

According to a statement issued by the fund, the company has paid "the total amount of unpaid rents to date, along with penalties and contractual charges, as well as the rent and condominium charges for October, which were paid in advance."

In the agreement, in addition to the voluntary exit and payment of overdue rents, WeWork also committed to leaving the furniture throughout the building.

Read more: In Crisis, WeWork May Impact Vacancy Rates in Brazil; at Least Six FIIs Admit Delays in Rent Payments

Others Agreements

WeWork has been experiencing some issues related to rental payments. According to market sources, the return of some properties is part of a strategy to reduce the company’s footprint in the country. The sources also indicate that WeWork plans to operate only its best-performing locations, returning spaces in less profitable properties.

In addition to the exit from Oscar Freire 585, the real estate fund Rio Bravo Renda Corporativa (RCRB11) recently announced a commercial agreement with the coworking company and other co-owners of the Girassol property, which consists of Blocks, A, B and C, located in São Paulo. The fund ensured full payment of overdue rents by WeWork, which was settled within 24 hours, without adjustments or penalties. WeWork also vacated Block C of the complex after paying a fine, which is being paid in three installments this semester. WeWork continues to occupy Blocks A and B, with a rent discount for the next 12 months.

Read more: The WeWork crisis: major landlords and real estate funds under pressure

Another agreement has been reached with Multi Renda Urbana (VVMR11), which leased offices in the One Eleven Building in São Paulo. The fund had been making frequent demands regarding payment delays for May and June. Following the decision, the rent for July was paid.

Additionally, HBR Realty (HBRE3) is also seeking to evict WeWork from one of its properties.

Oscar Freire 585 - Vinci Offices Portfolio

Delivered in November 2019, the Oscar Freire 585 building is located at Rua Oscar Freire No. 585, in São Paulo, near the Trianon-Masp metro station and the Shopping Jardim Pamplona. The building has a private area of 2,642 m², distributed over five corporate floors. The market value is R$81.45/m².

The property is part of the FII VINO11 portfolio and is expected to be completely vacant following WeWork's departure.

The Vinci Offices Fund mainly consists of Class B properties, such as Brooklin Business Square and Cardeal Corporate.

Latam

Brazil

São Paulo

Coworking

SPOT

Tenants In The Market

ABOUT SiiLA

Founded in 2015, SiiLA is the industry leading REsource for comprehensive commercial real estate market insights, news and events across Latin America. The SiiLA suite of innovative products drive greater accuracy, efficiency, and strategic advantages for top players in the commercial real estate industry.