Former WeWork hub, hollowed out by IBM’s exit, gets $70M refi
Arch revamping 88 University Place as it rebuilds occupancy
Arch’s Jeffrey Simpson and Adam Neumann with 88 University Place (Arch Companies, Getty, Google Maps)
After two years of turmoil, a Greenwich Village office building is mounting a comeback.
Arch Companies is refinancing 88 University Place to pay for renovations and lure new tenants after IBM vacated WeWork’s space in the early days of the pandemic, leaving the office building largely empty.
The firm closed on a $70.5 million refinancing loan to upgrade the 11-story property, its representatives told The Real Deal.
The Greenwich Village building was the site of controversy when WeWork co-founder Adam Neumann, as CEO of the co-working firm and part owner of the building, leased it to WeWork.
As of August 2019, Neumann owned part of the building through a partnership with Tahari Capital, the investment fund outgrowth of the Tahari fashion label, which tried to sell it.
The building’s current ownership partnership includes Arch Companies, Tahari and “other existing partners,” according to Arch, which declined to say if Neumann was among them.
IBM signed a membership deal with WeWork in 2017 to occupy 70,000 of the building’s 90,000 square feet. It was unprecedented at the time for one company to exclusively occupy an entire WeWork building.
Just over three years later, as the pandemic cleared out offices and WeWork was trying to recover from Neumann’s profligate management, IBM announced it would end its lease and vacate the building.
Now, with the $70.5 million bridge loan from a CIM Group–managed fund, the owners are revamping the 10 stories of office space and pitching tenants a “boutique” experience. High-end space has become increasingly important to firms trying to lure their workers back to the office.
Arch’s Jared Chassen (Arch Companies)
The renovations, which are underway, include a rooftop terrace, gym, bike storage and lounge. “It’s very rare for this type of building this size to have amenities,” said Jared Chassen, partner at Arch Companies.
The upgrades have already attracted new tenants, bringing the building’s occupancy rate up to about 50 percent over the past four months, said Jeffrey Simpson, managing partner at Arch. “We’re really excited to transform this building,” he said. “I would be surprised if we’re not fully spoken for before year end.”