WeWork, once valued at $47 billion, needs to slash costs and shore up its finances as it tries to continue operating. Filing for bankruptcy positions the company to break leases, exposing property owners to more empty space at a time US office markets are already reeling from rising vacancies and struggling to repay debt.

Barclays Plc estimates that the rejected leases and other locations no longer on WeWork's website bring the total to $2.5 billion in loans with exposure to recently shuttered or soon-to-be shuttered locations.

WeWork included a business plan that identified 105 locations as "never keeps" and an additional 58 that are being considered for exits, Barclays analysts Lea Overby and Anuj Jain wrote in a note Wednesday.

"We find $9 billion in probable CMBS exposure to the name," Overby and Jain wrote. "While this initial round of lease rejections did not affect most CMBS properties, the company may pursue additional lease rejections."

A spokesperson for WeWork said the company had made "significant progress" in its negotiations with landlords across the globe.

"We continue to proactively engage with our real estate partners to better align our long-term financial interests and find mutually beneficial lease agreements," a spokesperson said in an emailed statement. "The majority of this work in the US is done, and we plan to stay in the vast majority of markets as we move into the future and we always work to minimize member impact."

WeWork is a top-five tenant in properties backed by about 41 CMBS loans with a total balance around $3.5 billion, or 1% of the value of CMBS deals rated by Moody's Investors Service, according to Matthew Halpern, a senior vice president on the structured finance team at Moody's. 

Office markets in San Francisco and New York City, where WeWork is particularly dominant, could be damaged if the company vacates a large portion of its overall space, Halpern said. 

Almost 20% of New York offices were available for lease in the third quarter, up 8.5 percentage points from late 2019, before the pandemic made remote work more common, according to Savills. In San Francisco, the availability rate has soared to 36%, up almost 27 percentage points from the pre-Covid level.  

WeWork's list of rejected leases includes three Manhattan addresses where more than 20% of the office space is leased by the company — 599 Broadway, One Union Square and 385 Fifth Ave. — according to Barclays. 

"WeWork's actions are likely to have spillover effects," Overby and Jain wrote. "In addition to lowering property cash flows at affected properties, it is also putting additional office space on the market, likely pressuring rents in the area. It would also negatively affect the owners of these properties."