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WeWork is planning to file for bankruptcy as early as next week in what would mark a stunning reversal for the flexible-office-space venture that was once valued at $47 billion, WSJ Pro Bankruptcy reported. New York-based WeWork is considering filing a chapter 11 petition in New Jersey. WeWork missed interest payments owed to its bondholders on Oct. 2, kicking off a 30-day grace period in which it needs to make the payments. Failing to do so would be considered an event of default. On Tuesday, the company said it has struck an agreement with the bondholders to allow it another seven days to negotiate with the stakeholders before a default is triggered. A spokesperson for WeWork pointed to a securities filing early Tuesday that “the forbearance agreement provides time to continue in the positive conversations with our key financial stakeholders and engage with them to implement our ongoing strategic efforts to enhance our capital structure." In August, the company shook up its board after three directors resigned due to a material disagreement regarding board governance and the company’s strategic direction, according to a securities filing. WeWork appointed four new directors with expertise in large, complex financial restructurings. Those directors have been negotiating with WeWork’s creditors over the past several months about a restructuring plan as they prepare for the bankruptcy.

A federal jury on Tuesday found the National Association of Realtors and large residential brokerages liable for about $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high, the Wall Street Journal reported. The verdict could lead to industrywide upheaval by changing decades-old rules that have helped lock in commission rates even as home prices have skyrocketed — which has allowed real-estate agents to collect ever-larger sums. It comes in the first of two antitrust lawsuits arguing that unlawful industry practices have left consumers unable to lower their costs even though internet-era innovations have allowed many buyers to find homes themselves online. Announced in a packed Kansas City, Mo., courtroom, the verdict came after just a few hours of jury deliberations. The case was brought by home sellers in several Midwestern states. Their lawyers hugged and shook hands as the verdict was announced. Under antitrust rules, the presiding judge could triple the damages verdict, which would total more than $5 billion. The plaintiffs also have asked the judge to order changes to how the industry operates.

Commercial real-estate lending is shrinking to historically low levels, threatening a rise in defaults on expiring debt and a sharp decline in new construction of warehouses, apartments and other property types, the Wall Street Journal reported. Banks, insurance companies and other commercial property lenders have been cutting back since the first half of 2022 when the Federal Reserve began increasing interest rates and recession concerns intensified. But creditors have been even more reluctant to make new loans as Treasury bond yields have soared since early August. Most commercial real-estate loans are tied to short rates, not long-term rates. The rise in Treasury rates, however, unnerved already-skittish lenders and cast new doubt on whether a range of property types were overvalued. Total volume of commercial real-estate loans held by banks, the largest source of debt financing, declined during the first two weeks of October, according to analysis of Federal Reserve figures by Trepp, a data provider. Bank commercial property lending has declined for only two months since 2014. Most other two-week periods since 2014 have shown positive growth. Read more. (Subscription required.)

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WeWork Inc. and its creditors are locked in discussions over who will take the keys to the struggling co-working firm as the end of a debt grace period approaches, Bloomberg News reported. WeWork’s top backers including SoftBank Group Corp. and bondholders including King Street Capital Management are each seeking to take control of the company via a new restructuring after pouring money into the firm, said the people, who asked not to be identified because the discussions are private. BlackRock Inc. and Brigade Capital Management are also part of the negotiations. WeWork is seeking to finalize the restructuring deal in the coming weeks, and may execute it as part of a bankruptcy filing as soon as November, the people said. Terms of the deal have not been finalized and plans may change. In many restructuring scenarios, discussions center around how much debt a company can support, and therefore which creditors need to swap their debt for equity. SoftBank and the bondholder group have been negotiating how to treat a letter of credit facility SoftBank provided the company in 2020 that has since been amended multiple times, the people said. WeWork may need access to the facility to help support its short-term financing needs.

The Biden administration on Friday announced federal financing and other incentives designed to convert high-vacancy commercial buildings in downtown spaces around the country into residential use in an attempt to increase housing supply, The Hill reported. Administration officials said that office space vacancies have hit a 30-year high, while housing costs remain high for millions of Americans and there is a shortage of affordable housing units. Lael Brainard, director of the National Economic Council, said on a call with reporters that converting empty commercial buildings into residential use represents a “win-win” opportunity to simultaneously revitalize downtown areas with unused office space while increasing affordable housing units. “Housing affordability is a challenge for many American households, so the president has asked us to take a whole of government approach to making sure that we have affordable and accessible housing,” Brainard said. In order to make it easier for state and local officials to convert commercial space to residential space, the Biden administration released new guidance on how they can get financing for loans for those conversions through the Transportation Infrastructure Finance and Innovation Act and Railroad Rehabilitation & Improvement Financing programs. The Department of Housing and Urban Development (HUD) is releasing new guidance on how the Community Development Block Ground fund can be used to boost housing supply, while the Department of Transportation is releasing guidance to make it easier for transit agencies to transfer properties that are no longer needed, such as underutilized storage facilities that could be converted to affordable housing.

Mutual funds that purchased $280 million of municipal debt to finance a 320-acre youth-sports complex near Phoenix would be virtually wiped out under a preliminary deal struck in the bankruptcy case, Bloomberg News reported. Miami-based Burke Operating Partners agreed in principal to purchase Legacy Park for $25.5 million, with most of the proceeds going to building contractors for unpaid work. Bondholders would receive $2.2 million in cash and 11% of preferred equity in a new company that would own the facility according to an agreement outlined in a bankruptcy court hearing late Tuesday. It would need to be approved in the bankruptcy process to take effect. Legacy Park has enough cash to remain open while the parties work to close the deal by the end of the November, said Keith Bierman, the complex’s chief restructuring officer. Legacy Cares filed for bankruptcy in May, saying construction setbacks, labor shortages and supply-chain delays amid the pandemic led to the park’s delayed opening and resulted in lost revenue. Mutual funds including the Vanguard Group and AllianceBernstein Holdings LP hold the $280 million of Legacy Cares bonds issued by an Arizona agency. The bonds last traded on Aug. 23 for 10 cents on the dollar. In addition to labor shortages, Legacy Park was also plagued by poor execution of restaurant and concession operations. In all, Legacy Park brought in just $27.7 million in 2022, far short of its nearly $100 million projection. It was losing more than $1 million a month on operations alone.