Man, this was covered, in-depth, in the article. Not only the recession case but the fact that WeWork will likely just default on a lot of leases in the worst case scenario as the lease is signed by a independent corporation that has no assets for the landlord to seize. In addition, of course landlords would re-negotiate with WeWork, better to have some money than none.

Except, as noted above, real estate leases usually don't get renegotiated. I don't know if it's because of the long time frames or exactly why, but landlords frequently would rather leave a building empty than not get their rates.

It’s because there are huge tax incentives for “under preforming” real estate investors. It’s honestly maddening. You literally get to deduct everything short of your desired “market” rent (even if the market can’t bear it, you just need a team of appraisers on your side) and you can even include upgrades and entrepreneurial risk as a deduction.

https://www.nreionline.com/finance-investment/struggling-vac...

Yep, that's why I'm trying to dig deeper in this as the HN doesn't seem to be convinced or didn't read the article :)

Color me not convinced. They have a lot of leases. It’s top of market and they’re still subsidizing their customers. Won’t actually have leverage against a host of major real estate debtors. Nor will it be easy for them to sign newer leases again when that recession ends. And “we’ll just default” is a terrible story to tell during the road show.

Yeah, same. Companies like Uber have a massive power and information advantage negotiating with their contractors (who have taken on a lot of Uber's financial risk). But commercial landlords are a whole different deal. They have seen it all, are experienced in weathering the vagaries of the market over long time scales, and are really not interested in being a sucker.

I also suspect WeWork doing deals with larger companies is not going to help them much in a downturn, because they are likely to be savvy players as well. If WeWork is threatening to default on a space, I'm sure there will be corporate office teams from stable industries saying, "Oh, we'll take that nicely built out space, thanks."

Landlords have unusually long timelines. They might be willing to let the tenant go bankrupt, ride out a 2-year recession, and wait for a tenant who can sign a 10 year lease at higher rates.

Landlords leave spaces empty all the time. Or they'll even bulldoze a building, get a tax cut, and lease the space to a parking lot operator rather than take the easy way out and lease their space at low rates.