What will happen to WeWork’s Marin County offices as dozens of locations are closed?

One of the largest global landlords for flexible-term office space is exiting dozens of locations in another round of cost-cutting measures, but WeWork said its Marin County location won’t be on that list.

The New York-based company in reporting its third-quarter results on Nov. 10 said that it would close about 40 “underperforming locations,” totaling around 41,000 workstations, mostly this month. But Greg Rosso, director for New York-based company’s Bay Area region, told the Business Journal that its 35,000-square-foot Marin location in the 1 Belvedere Place office building in Mill Valley could hardly be described that way.

“Our flagship Mill Valley location, among other suburban markets, has performed exceptionally well for North Bay members,” Rosso said in an email Tuesday. “As companies offer location flexibility to their employees, we now see once-distributed teams come together in-person. The positive energy in the office is palpable.”

He declined to say what will happen to the other two dozen WeWork centers in the Bay Area, where the company collectively has 2 million square feet of space.

Demand for office space, particularly in urban areas, dropped early in the pandemic, as employers shifted jobs to remote work, if possible, the New York Times reported.

WeWork has been touting the shift away from traditional office space as an opportunity for the company’s “flex model,” as CEO Sandeep Manthrani said on the quarterly conference call, the publication reported.

WeWork’s business model involves leasing office space that is in turn rented to individuals, small firms or company groups for terms typically shorter than owners of traditional commercial space typically offer.

Such flexible space makes up less than 2% of office real estate currently, but that’s expected to balloon to about 30% by 2030, according to a projection by commercial real estate firm JLL.

WeWork offers varying levels of private spaces together with services such as network connections and refreshments. Company plans at the Mill Valley location include All Access ($299 a month) and On Demand ($29 a day).

But the share of WeWork space globally occupied by large companies slipped to 47% in the third quarter from 49% a year before, according to the Times.

Nationwide, demand for office space has been recovering from the pandemic faster this year in suburban markets and those with clusters of life sciences companies, as those areas tend to have faster return-to-the-office momentum from employers and reductions in public-health restrictions, according to NAIOP, a North American trade group for commercial real estate professionals.

But California like New York City and some other large U.S. cities have trailed the rest of the nation in ramping down such policies. Only early this year did the Golden State shift to an “endemic” approach to the virus, and Sonoma County in February was the last county in the state to drop restrictions on public meetings, The Press Democrat reported. The state let its indoor mask requirement expire at that time also.

WeWork has been faulted for expanding too quickly and too expensively, and the cost cutting has been part of months-long effort to cut its cash spending, according to the New York Time. The company burned through $915 million in the first nine months of this year to invest in and operate the business, leaving it with $460 million in cash at the end of the third quarter in September.

The company has become increasingly owned by its benefactors, the Japanese conglomerate SoftBank and a fund run by SoftBank, which have extended billions of dollars in financing to prop up WeWork as it adjusts.

WeWork suggests that demand for short-term office space is returning to the Bay Area. Rosso wouldn’t specify occupancy rates — a measure of how utilized the space is — for the Mill Valley center or across the Bay Area.

However, he did say the company’s locations in the San Francisco market, in which the company includes Marin, had over 80% occupancy, up from 75% in August, the last market figure Rosso provided.

And in the first 10 months of this year, that market saw an increase of 83% in total bookings for All Access members and over 130% for On Demand users, Rosso said.

“We continue to see Mill Valley operate similar to our more suburban locations as employees look to slash commute times while still being able to work in high-quality, Class A spaces outside of their home office,” Rosso said. “The flexibility WeWork provides continues to offer them that ‘third workplace’ optionality in closer proximity to the home, schools, and neighborhoods.”

The company opened the Mill Valley location in early 2019 and by early 2020 expanded to another 26,000 square feet in the adjacent building. But as the pandemic cut into office occupancy, WeWork pared back its Marin footprint to one building.

WeWork has 728 open and soon-to-open locations in 119 cities in North and South America, Europe, Africa, Asia and Australia.

By comparison, IWG Group, which operates the Regus, Spaces, HQ and other flexible-space centers, has about 30,000 locations in 175 countries. The group has several North Bay locations in Napa, Marin and Sonoma counties.

Jeff Quackenbush covers wine, construction and real estate. Before coming to the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

Corrections: Greg Rosso is WeWork’s Bay Area director. San Francisco market occupancy was over 80% in the third quarter.