Barclays Warns of Major Wework Risk in Commercial Mortgage Bonds
Barclays has warned investors of a major risk posed by WeWork in the commercial mortgage-backed securities (CMBS) market. The bank said that the office-sharing company’s leases could be a major source of losses for investors in the CMBS market.
WeWork’s Impact on CMBS Market
WeWork has been a major player in the CMBS market since its founding in 2010. The company has leased more than 10 million square feet of office space in the U.S. and Europe, and its leases account for about 1.5% of the total CMBS market.
The company’s rapid growth has been a boon for the CMBS market, as it has provided a steady stream of rental income for investors. However, the company’s recent financial troubles have raised concerns about its ability to continue to pay its rent.
Barclays’ Warning
In a report released on August 9th, Barclays warned that WeWork’s leases could be a major source of losses for investors in the CMBS market. The bank said that the company’s leases could be a “significant source of losses” if it were to default on its rent payments.
The bank also noted that WeWork’s leases are concentrated in certain markets, such as New York City and London, which could lead to higher losses if the company were to default.
WeWork’s Financial Troubles
WeWork has been struggling financially in recent months. The company has been forced to lay off thousands of employees and has been unable to raise additional capital.
The company’s financial troubles have raised concerns about its ability to continue to pay its rent. WeWork has already defaulted on some of its leases, and there is a risk that it could default on more in the future.
Risk to CMBS Investors
The risk posed by WeWork’s leases is a major concern for investors in the CMBS market. If the company were to default on its rent payments, it could lead to significant losses for investors.
The risk is particularly acute for investors in CMBS backed by WeWork leases. These investors could be exposed to losses if the company were to default on its rent payments.
Impact on CMBS Market
The risk posed by WeWork’s leases could have a significant impact on the CMBS market. If the company were to default on its rent payments, it could lead to losses for investors and could cause a decline in the value of CMBS.
The risk posed by WeWork’s leases is a major concern for investors in the CMBS market. Barclays has warned that the company’s leases could be a major source of losses for investors if it were to default on its rent payments. Investors should be aware of the risk posed by WeWork’s leases and should take steps to protect themselves from potential losses.