WeWork Overview
WeWork has increased its share of the market. With fewer employees going into the office since the pandemic, companies have slashed the amount of space they lease, causing challenges in commercial real estate.
WeWork was recently valued at $47 billion by SoftBank. It pays landlords a substantial amount and relies on renting to cover high costs.
Financial Challenges
WeWork is perhaps days away from a bankruptcy filing, which could have a significant impact on office landlords. Many landlords accepted lower rents from WeWork to keep it afloat, making its potential bankruptcy a major blow.
Background of WeWork
WeWork was started by Adam Neumann and Miguel McKelvey. What they started in a warehouse soon became a coworking model that spread to over 100 spaces. They eventually sold the business to their partner, leading to the birth of WeWork.
Lease Negotiations and Business Strategy
Neumann made significant profits by leasing his properties back to WeWork. The company’s approach to rent negotiations and business model have raised questions about its sustainability.