Regus Corp., which rents furnished office space to businesses and individuals on short-term deals, has put a small portion of its portfolio in New York, Chicago, San Francisco and other cities into chapter 11 bankruptcy as urban office markets face heavy pressure during the coronavirus pandemic, WSJ Pro Bankruptcy reported. Demand for temporary office space in large cities has fallen since businesses around the country adopted work-from-home policies. Regus said in court papers filed yesterday in the U.S. Bankruptcy Court in Wilmington, Del., that the chapter 11 filing buys the company time to continue negotiations with some of its landlords. Regus offers on-demand office and co-working space in more than 1,000 locations across the U.S. and Canada, court papers said. The chapter 11 covers about 2 percent of the company’s U.S. portfolio at some locations in large cities. James Feltman, a managing director at management firm Duff & Phelps LLC who has been retained by Regus, said in a declaration that the business has cut pricing to attract and retain new occupants while taking steps to reduce costs and preserve liquidity. Some occupants, meanwhile, have either fallen behind on occupancy fees or refused to continue paying them to preserve their own cash, Feltman said. Regus, owned by global workspace provider IWG PLC, has negotiated forbearances and rent deferrals with certain landlords and in some instances negotiated permanent modifications to leases to “bring them in line with the COVID-19-adjusted market realities,” Feltman said. Negotiations hit an impasse with landlords at locations covered by the chapter 11 filing, he said.
