let's also talk about another mover today wework is doing all it can to survive CEO David toli writing in a public letter that the company is renegotiating nearly all of its leases and also plans to exit quote unfit and underperforming locations the letter following wework's warning last month that there was quite substantial doubt about its ability to stay in business despite this though the Stock's still under pressure off another five percent today and Akiko you and I have talked time and time again just about the road ahead for wework obviously it's going to be extremely hard given the macro economic conditions given the trouble that we're seeing play out across the office sector across a commercial real estate but when it comes to wework and their locations they still have 777 locations globally as of the end of June that's a heck of a lot of locations given the fact that occupancy and also membership fell again in the second quarter from the first quarter so they're trying to do all they can to rein in some of their costs save money where they can their ability though to renegotiate some of these leases with landlords how flexible some of these landlords are going to be that's the big question you mentioned the 777 locations that amounts to roughly 13 billion dollars in long-term lease obligations insured that's down significantly from Adam Newman's days which exceeded 18 billion dollars but there's a few things that stood out to me in that letter that Dave Tully put out you know one uh he said specifically that current lease liabilities amount to over two-thirds of total operating expenses in Q2 specifically saying that is dramatically out of step with current market conditions the company's saying they plan to take immediate steps to fix inflexible and high cost lease portfolios but you know Shawna I guess the question here and we've gotten a number of answers from from guests we've had on the show which is how significant would it be if if we work were to go under whether in fact they were not able to meet their leases and that seems to still be sort of a mixed bag Manhattan for example you know they accounted for roughly a court of new leasing activity in New York but when you consider just how many offices there are it's still a small share yeah very small share but at least for New York and also we talk about the fact that when we talk about office landscape office real estate here commercial real estate but specifically the offices there's a huge divide right between the class A Properties and some of those underperforming properties some of the cheaper properties and there was actually a report out here or a number of retail Executives in recent weeks saying that this trouble here with wework that that could actually further that divide between the class A Properties and the more dated ones given the fact that a number of wework sites are in some of those lower quality buildings so even if it's with a city as large as New York even if it's more of a New York specific story or a story more specific to some of those larger cities across Across the Nation still though you think those Ripple effects would have some sort of impact across the industry
