Most of those obligations are through special-purpose entities for each location. They just walk away from all but the most profitable ones and leave the landlords holding the bag.

Re: "special-purpose entities":

Why would landlords agree to this? "Hey guys, we'll sign a 25 year lease with you but only through a special purpose entity, so we back out at anytime and you can't do anything!". Given how choosy and patient commercial landlords are (eg. letting properties stay vacant for years to find the right tenant), why did they make an exception for wework?

They probably signed triple-net leases with WeWork, meaning that WeWork pays rent, property taxes, utilities, and upgrades/maintenance.

If WeWork walks away, they leave behind nice offices that the landlord can rent out to another tenant with minimal investment beyond a few months lost rent (that could theoretically be recouped from WeWork).

Yup. My wife worked in commercial real estate (contracts and billing, before the crash in that biz) and she surmised exactly the same thing.

I think most real estate folks learned their lessons in the dot-com bust. Lot's of folks were making stupid office space deals with tech companies in return for warrants, etc., which ended up being worth less than nothing.

That's fine if they never plan to sign another lease. It's like saying oh, you can't service your debt huh, just declare bankruptcy! Sure, if you don't plan to need credit in the next 7 years.

Corporate bankruptcy doesn't work exactly the same as personal bankruptcy. WeWork declares bankruptcy, it's officers find a couple of new, untainted folks to hold key corporate officer positions, and suddenly YouSlave, Inc is open for business and looking to rent space. Might need to polish your D&B a little, but that's easy enough.

Owners of office buildings aren’t stupid. If WeWork created a special entity to rent each building, rent would go up significantly, or the landlord would require the parent company to guarantee that rents would be paid.

Or did WeWork pay for refurbishing the building, so that, if they stop renting early, the building’s owner ends up with a better building than what it had before?

The latter. They invest heavily in FF&E and the landlord gets to keep the improvements no matter what

We will have to leave the glass walls and wood floors, but the other stuff should be movable and liquidated to help We's balance sheet.

"FF&E are movable furniture, fixtures, or other equipment that have no permanent connection to the structure of a building or utilities. These items depreciate substantially but definitely are important costs to consider when valuing a company, especially in liquidation."

https://en.wikipedia.org/wiki/Furniture,_fixtures_and_equipm...

Then, the mother company can indeed get out fairly easily, at the price of some goodwill, making it, IMO, a (possibly only slightly) less risky investment.

Mightn't it be possible to pierce those subsidiary corporate veils to reveal (make liable) the parent corp?

Even if not, they are in for some expensive lawsuits. It won't be a matter of simply walking away.

I would be amazingly disappointed if

1. WeWork got away with this no matter how stupid those landlords were

2. Landlords actually signed out leases with no collateral considerations.

Though, to be honest, assuming WeWork doesn't actually stiff them on time the space was in active use and a bit of a margin... then I'm less disappointed, since the land lords will have lost very little actual value.