Parkmerced Residential Complex Sues WeWork For Contract Breach

The Parkmerced residential community is situated next to Lake Merced Park and consists of around 3,000 units. Photo courtesy of Google Earth.

SAN FRANCISCO—Parkmerced Investors LLC, the financial backers of the Parkmerced apartment complex in San Francisco, filed a lawsuit against WeWork on Thursday, May 28.

Parkmerced is suing the co-workspace company for a minimum of $100 million in damages because WeWork backed out of a $450 million investment contract.

Parkmerced is the largest private residential complex in Northern California and is self-described as a “unique SF community.” The rent-controlled, planned residential complex is settled between Lake Merced Park, a golf course, and the Pacific Ocean. Parkmerced sits on around 150 acres, housing its 3,000 units that are either high-rise apartments or townhomes.

WeWork’s $450 million investment deal was supposed to contribute to the debut of Parmkerced’s own WeLive communal living project.

WeLive, an offshoot enterprise of the WeWork company, sets up residential communities in different cities. The communal living spaces are supplied with amenities like hot tubs, fitness classes, and a lounge, along with holding residential bonding activities like happy hours. WeLive residents can stay for either a few nights or months. According to the website, “All you have to do is show up with your suitcase.”

Neither WeWork nor Parkmerced immediately responded to a request for comment.

This is not the first time this year that WeWork and Parkmerced have gone head to head in the courtroom. In late March, WeWork sued Maximus Real Estate Partners, the primary developers of Parkmerced, for not paying a $20 million exclusivity fee, a charge made when the length of time that a deal remains exclusive is prolonged.

Parkmerced’s criminal complaint on Thursday noted that as a result of WeWork breaching the contract, the San Francisco residential company is now saddled with millions in loan fees and other costs.