Our well-informed readers are all familiar with the meteoric rise and startling fall of WeWork.


Personally, I often look to historical analogies or the Classics to help better analyze current events. I see parallels to be found here in the Greek myth of Icarus. Like Icarus, WeWork flew too close to the sun. Like many impatient but brilliant entrepreneurs, its visionary founder was infused with hubris and expanded too fast before the company could digest billions in capital expenditures. When this became clear, Adam Neumann also fell into the sea when he was thrown overboard by the WeWork Board of Directors. But unlike lcarus, Neumann did not drown thanks to the overgenerous golden parachute provided by Softbank (with his shares conveniently valued just below the $20.00 option strike price which would have put other employees in the money).


Below are 3 key issues for the savvy tenant to consider regarding the uncertain future of WeWork:


1) What will become of the WeWork spaces? The future is cloudy. The company is attempting to survive by focusing on a few potentially profitable cities in the US and Europe and cutting costs. This may not be enough to save the day. The staff is in turmoil and morale has understandably been shattered. Members at the end of their leases are being offered better deals to stay. All new construction is allegedly on hold.

However, in a recent press release, WeWork claimed to have opened 52 buildings worldwide in December, a record for one month. On a more impressionistic basis, a recent visit to a midtown NYC office revealed a bustling business filled to the brim with spirited entrepreneurs, notwithstanding the alleged tarnish to the WeWork brand.


2) Will WeWork survive? In our view, it almost doesn’t matter from the tenant standpoint. The co-working idea is a huge success and here to stay as it is what tenants want. WeWork’s great blunder was the direct lease of so many spaces around the world.  Other companies providing the same service won’t make the same mistake.

If WeWork is gone, competitors are poised to take its place. Landlords will meet the demands of tenants with direct space that cuts out the middle person. Other co-working companies will provide operational support or partner with landlords without taking on the huge risk of leasing millions of square feet directly from the landlords.


3) The lesson learned: if you can’t beat them, copy them. WeWork’s competitors are poised to pick up the slack if the company falters. And tenants will have plenty of exciting co-working options to choose from, no matter what happens to WeWork. Of course, some co-working facilities are better than others, ranging from excellent to terrible.  We at Wharton Property Advisors can help you separate the wheat from the chaff.  Feel free to call on us to tap our market expertise.

Thank you,
Ruth Colp-Haber
Counselor of Real Estate
Fellow of Royal Institution of Chartered Surveyors

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NYC Office Lease Consultants