News Summary
WeWork has significantly reduced its office space in downtown Durham following its bankruptcy filing. The company now occupies only the fifth floor of One City Center, resulting in over a 50% decrease in its office footprint. In response to ongoing financial challenges, WeWork vacated the fourth floor, which is now available for lease. The broader Raleigh-Durham market is also experiencing high vacancy rates, though some properties remain fully leased as new tenants show interest.
Durham Experiences Significant Reduction in WeWork’s Office Footprint Following Bankruptcy Filing
Durham, North Carolina — WeWork has notably downsized its office operations within downtown Durham as part of its broader financial restructuring after filing for bankruptcy in March 2024. The coworking company’s presence in Durham has been sharply reduced, with its current occupancy limited to just the fifth floor of One City Center, totaling 32,098 square feet. This marks a more than 50% decrease from its previous footprint in the building.
Recent Changes in Durham Location
In late May 2024, WeWork vacated the fourth floor of One City Center, an area approximating 30,000 square feet, which is now listed for lease or subdivision. These moves reflect WeWork’s effort to streamline operations amid ongoing financial challenges. Despite these cutbacks, the company continues to operate in Raleigh, maintaining 73,000 square feet across three floors in the One Glenwood building near the Warehouse District.
Market Context and Rental Activity
The broader office market in the Raleigh-Durham region remains characterized by high vacancies, driven largely by remote work trends, weak tenant demand, and economic factors such as elevated interest rates and tariffs. The overall vacancy rate peaked at 21.3% in the first quarter of 2024 and edged down slightly to 21.2%. While this suggests some stabilization, vacancies remain elevated.
Despite these conditions, certain properties like One City Center are reported to be fully occupied, indicating some resilience within specific segments of the market. The leasing agent overseeing the property notes that tenants are still interested in larger office spaces, with more than 25 tenants actively seeking spaces over 20,000 square feet across the Triangle area. This activity hints at a potential increase in leasing interest if conditions improve.
New Leasing Trends and Market Activity
Recent leasing activity reveals an uptick in new-to-market tenants, including notable companies such as Infosys, Kimley-Horn & Associates, and Hill-Rom Company, which have recently secured significant office leases in the region. The redeveloped N.C. Mutual Tower in Durham has also attracted new tenants, including DPAC, Logisticon, Inc., and Cape Residential, demonstrating ongoing interest in Durham’s office market despite overall high vacancy rates.
Construction and Future Supply Outlook
The current construction pipeline in the Triangle is reported to be empty, with no new office projects underway or scheduled to begin soon. This absence of new supply in the near future may help stabilize rental rates and occupancy levels, creating cautious optimism regarding the region’s fundamentals.
Community-Centric Coworking Alternatives in Durham
The challenges faced by WeWork are part of a nationwide trend affecting many office markets, driven by remote work and economic pressures. In Durham, the opening of community-focused coworking options is seen as a viable alternative. The new Switchyards work club, which will open soon, plans to cap memberships at 250 and offer memberships at $100 per month—lower than many competitors. The concept blends features of coffee shops, libraries, and hotel lobbies to foster community and flexible working arrangements.
Meanwhile, Blush Cowork in Cary continues to operate successfully as a locally owned coworking space, emphasizing community engagement amidst the shifting landscape of shared workspaces. This trend toward community-centered work environments reflects a broader shift in coworking preferences, focusing on social interaction and flexible spaces.
Summary
In summary, Durham’s office market is experiencing significant changes with WeWork’s reduction of its footprint following bankruptcy proceedings. While high vacancy rates persist regionally, selected properties remain fully leased and new tenants continue to show interest in larger office spaces. The local development pipeline remains inactive, yet innovative coworking solutions aimed at community engagement are emerging as alternatives to traditional office spaces, reflecting evolving work trends in the region.
Frequently Asked Questions
- Where is WeWork currently operating in Durham?
WeWork is operating only on the fifth floor of One City Center, totaling 32,098 square feet. - What happened to WeWork’s other Durham location?
In late May 2024, WeWork vacated the fourth floor of One City Center, approximately 30,000 square feet, now being marketed for lease or subdivision. - Does WeWork still operate in Raleigh?
Yes, WeWork continues to operate 73,000 square feet across three floors in Raleigh’s One Glenwood near the Warehouse District. - What is the current vacancy rate in the Raleigh-Durham office market?
The vacancy rate reached 21.3% in Q1 2024 and slightly decreased to 21.2% afterward. - Are there signs of increased leasing activity?
Yes, over 25 tenants are seeking office spaces larger than 20,000 square feet, and new tenants like Infosys, Kimley-Horn & Associates, and Hill-Rom have signed significant leases. - Are there new coworking options in Durham?
Yes, the Switchyards “neighborhood work club” is set to open, with memberships capped at 250 and priced at $100 per month. Blush Cowork in Cary remains active as a locally owned coworking space.
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Additional Resources
- News Observer: Durham Experiences Significant Reduction in WeWork’s Office Footprint Following Bankruptcy Filing
- Indy Week: Switchyards Coworking Durham
- Axios: Office Vacancies in Triangle Region Due to Remote Work
- Spectrum Local News: Cary Coworking Space Thrives After WeWork Bankruptcy
- Wall Street Journal: Companies Bringing the Office to Remote Workers
- Wikipedia: Office Space
- Google Search: Coworking Spaces
- Google Scholar: Remote Work Trends
- Encyclopedia Britannica: Coworking
- Google News: Office Vacancy Rates
Author: STAFF HERE RALEIGH WRITER
RALEIGH STAFF WRITER The RALEIGH STAFF WRITER represents the experienced team at HERERaleigh.com, your go-to source for actionable local news and information in Raleigh, Wake County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the North Carolina State Fair, Raleigh Arts Festival, and the Hopscotch Music Festival. Our coverage extends to key organizations like the Greater Raleigh Chamber of Commerce and Visit Raleigh, plus leading businesses in technology and education that power the local economy such as Red Hat and NC State University. As part of the broader HERE network, including HEREAsheville.com, HERECharlotte.com, HEREGreensboro.com, and HEREOBX.com, we provide comprehensive, credible insights into North Carolina's dynamic landscape.
