In today's market, this presents a number of conflicting problems for landlords:

Tolley has essentially said that WeWork won't keep all its locations — and might possibly pull entirely out of some markets. It's an abrupt preemptive negotiation tactic to wave a flag of dispensability at property owners. "Agree to our terms or we'll drop you," to put it more bluntly.
WeWork's overly (and, in retrospect, foolishly) generous use of money to lock down locations early on means there is likely a very large gap between where rents are and where the company wants them to be.
In many areas, office landlords already face serious challenges in keeping space leased, battling vacancy rates, and needing to maintain rents for the leased parts of buildings that can sustain the business of the whole.
Giving in to serious demands for rent reductions from one tenant opens the door to others demanding equal consideration.
As the Wall Street Journal pointed out, if WeWork were to end up filing for bankruptcy, the legal proceedings "allow for the rejection of undesirable contracts and would give WeWork legal power to reject undesirable leases while extinguishing its liability for any resulting damages claim." And any leases rejected turn into unsecured debt, meaning the landlords would line up behind bondholders and any other secured creditors.

The next few weeks are going to be interesting for the entire office market.

Instant Insights /

Landlords Ponder Whether to Cave to WeWork's Demands for Better Lease Rates