WeWork Receives Eviction Notice in Brazil Over Unpaid Rent
- After months of unpaid rent, WeWork has received its first eviction notice
Board games, bike racks, relaxation spaces, and a pet-friendly environment weren’t enough to save WeWork from an eviction notice at its iconic building on Paulista Avenue. The property in question is the Grande Ufficiale Evaristo Comolatti, commonly known as the Comolatti building.
The coworking company referred to the property as "Paulista 2537." The building’s owners initiated eviction proceedings due to non-payment of rent, filing an emergency request for vacating the premises.
Stan, the owner of the Comolatti building, presented their case based on a lease agreement signed with WeWork in March 2018. The lease was supposed to last 15 years, but the tenant has failed to make payments since June 2024.
The document shows that WeWork owes over R$4 million, and according to a contractual clause, the company was required to make the payment within 25 days of the first notice.
Stan is seeking the termination of the lease, which is valued at 12 months of rent. Based on the current monthly rent of R$1.2 million, the lawsuit is valued at approximately R$14.4 million. Additionally, the plaintiffs are not interested in pursuing mediation, citing several failed attempts to resolve the issue amicably.
The request was granted by Judge Luciana de Oliveira of the 22nd Civil Court, and WeWork is now required to pay three months' rent with a 30% increase, totaling R$4.6 million. The coworking company has 15 days to vacate the Comolatti building or settle the outstanding debts.
Stan chose not to comment on the matter. *WeWork claims that it does not recognize the decision and that it has not received any notification about the issue, continuing to operate as usual. Here's their statement:
"We are unaware of any notification regarding the matter. The company continues to operate fully in all buildings in Brazil. Our temporary actions aim to accelerate conversations to reach resolutions that are in the best interest of our entire ecosystem. We remain committed to finding mutually beneficial solutions that are better aligned with current market conditions and that allow us to move forward successfully in our restructuring process. Our members remain our top priority, and the ongoing negotiations do not alter our commitment to providing the excellent service they expect."
Issues
According to WeWork's website, the company serves 30,000 clients across 8 cities and 31 locations in Brazil. At the Comolatti building, the company has not disclosed how many tenants are present, and those contacted by the REsource team declined to comment.
This is not the first issue for WeWork. The company previously went through bankruptcy proceedings in the U.S. but stated that the crisis would not affect its Brazilian operations. Later, REsource reported WeWork's first case of default in Brazil at WTorre Morumbi.
Shortly afterward, another article exposed further cases of default, including at the Centro Empresarial Nações Unidas, OF 585, One Eleven Building, Brazilian Financial Center (also on Paulista Avenue), and blocks A, B, and C of the 555 property.
So far, Stan is the first company to issue an eviction notice.
*Updated on August 13, 2024 - 08:45 AM
