"They will go completely horizontal beyond office spaces to manufacturing furniture for themselves... becoming a leader in real estate as an industry. The key is to own the customer. They own their customer, and that is extremely valuable."
businessinsider.com/wework-wants-t…
businessinsider.com/wework-wants-t…
Good read on WeWork.
Beyond the co-working aspect, they are automating the process of designing/constructing new spaces. Construction is a multi-trillion dollar industry ripe for tech disruption, and WeWork is positioning itself in an interesting spot.
Beyond the co-working aspect, they are automating the process of designing/constructing new spaces. Construction is a multi-trillion dollar industry ripe for tech disruption, and WeWork is positioning itself in an interesting spot.
https://twitter.com/nzarchitecture/status/1007284234409693184
Automating WeWork's co-working model is important when thinking about how real estate works:
High fixed costs (take on debt, pay admin costs, insurance, etc), charge rent, make ~6-12% cash flow margin.
A decent amount of rent increase is incremental cash flow though.
High fixed costs (take on debt, pay admin costs, insurance, etc), charge rent, make ~6-12% cash flow margin.
A decent amount of rent increase is incremental cash flow though.
WeWork's model already generates more rent/SF than trad'l landlords (at higher risk). Can boost cash flow by squeezing more rent from existing leases.
The game changes as WW really ramps up BUYING vs leasing - Will be hard for incumbents to compete w/ WW's data-driven pricing.
The game changes as WW really ramps up BUYING vs leasing - Will be hard for incumbents to compete w/ WW's data-driven pricing.
How will WeWork's data-driven approach price out incumbents?
Competitor: "My model shows a $100k annual NOI. At a 10% cap rate, I offer $1mil".
WW: "Oh, ours shows $200k annual NOI. So at a 10% cap rate, we offer $2mil".
Extreme example. But WW is going to have huge advantage.
Competitor: "My model shows a $100k annual NOI. At a 10% cap rate, I offer $1mil".
WW: "Oh, ours shows $200k annual NOI. So at a 10% cap rate, we offer $2mil".
Extreme example. But WW is going to have huge advantage.
I could see a world where WeWork disrupts Amazon's dominance in logistics by doing to industrial warehouses what it did to commercial real estate. What if anyone could rent space in 200 warehouses around the world and guarantee free, same-day shipping?
https://twitter.com/tbwester/status/1031984432108978181
“SoftBank is in discussions to take a majority stake in WeWork, an investment that could total between $15 billion and $20 billion”
wsj.com/articles/softb…
wsj.com/articles/softb…
WeWork’s Creator Awards are the next steps in building its accelerator program. WeWork will have a massive pipeline of early stage companies as it rides the remote working trend and improves its value-add (the network, free rent, food, and training, etc)
creatorawards.wework.com
creatorawards.wework.com
WeWork’s investment program also fits right into SoftBank’s wheelhouse. WeWork’s actual cash flow is second fiddle to SoftBank getting early access to the best WeWork tenants. SoftBank acquiring a majority share of WeWork makes a lot of sense through this lens.
Scary headline, but:
-$10B of the planned $16B was the Vision Fund simply buying out every other investor
-$4B of remaining $6B were commitments for '20 and '21
-The "lower" $2B is what was originally planned for '19
-WeWork still has $6B in cash on hand
ft.com/content/282bd0…
-$10B of the planned $16B was the Vision Fund simply buying out every other investor
-$4B of remaining $6B were commitments for '20 and '21
-The "lower" $2B is what was originally planned for '19
-WeWork still has $6B in cash on hand
ft.com/content/282bd0…
In other words, SoftBank (or ultimately the Saudi's and Abu Dhabi) is reducing risk by 1) not buying out every single non-founder/employee on the cap table and 2) not making any forward commitments. WeWork will still have the same $8B of cash to work with
ft.com/content/282bd0…
ft.com/content/282bd0…
WeWork's (now The We Company) valuation is now at $47B.
"Rather than just renting desks, the company aims to encompass all aspects of people’s lives, in both physical and digital worlds."
When do we start seeing We Company subs compared to Amazon Prime?
fastcompany.com/90289512/exclu…
"Rather than just renting desks, the company aims to encompass all aspects of people’s lives, in both physical and digital worlds."
When do we start seeing We Company subs compared to Amazon Prime?
fastcompany.com/90289512/exclu…
$110M of WeWork's ~$18B future lease obligations (or 0.6%) are owed on properties its CEO has at least a partial ownership stake. Looks like he's trying to increase that too.
I figured WeWork would start actually buying real estate soon, but not Neumann.
wsj.com/articles/wewor…
I figured WeWork would start actually buying real estate soon, but not Neumann.
wsj.com/articles/wewor…
Aside from obvious conflict of interest issues everyone else will tweet about, I wonder if this is a bridge strategy pre-WeWork purchasing properties?
Keeps risk off WeWork's balance sheet and explains why he sold "over $100 million worth" of shares.
wsj.com/articles/wewor…
Keeps risk off WeWork's balance sheet and explains why he sold "over $100 million worth" of shares.
wsj.com/articles/wewor…
Here's a thread detailing how WeWork could be valued @ $16B. I think it may underestimate:
-Impact of switch to remote work/smaller offices
-WeWork only getting 5% of global mkt share
-Doesn't really incorporate the "data advantage" WeWork claims to have
-Impact of switch to remote work/smaller offices
-WeWork only getting 5% of global mkt share
-Doesn't really incorporate the "data advantage" WeWork claims to have
https://twitter.com/modestproposal1/status/1085588722488434688
Re-posting this, but short blog post on WeWork's laser scanning tech. Most important line in my opinion:
"The precision of laser scanning speeds up the process of opening new WeWork locations"
wework.com/blog/posts/usi…
"The precision of laser scanning speeds up the process of opening new WeWork locations"
wework.com/blog/posts/usi…
WeWork continues moving into real estate analytics:
“We’re making sure rooms are used the right way. A company may do happy hours on Thursdays, but more people show up to afternoon tea times or other types of session. Companies can A/B test their space.”
techcrunch.com/2019/02/07/wew…
“We’re making sure rooms are used the right way. A company may do happy hours on Thursdays, but more people show up to afternoon tea times or other types of session. Companies can A/B test their space.”
techcrunch.com/2019/02/07/wew…
"Another sign of just how large WeWork’s ecosystem has become: It employs 1,300 people in architecture, interior design, engineering and related activities - an employee roster that would make it one of the biggest architecture firms in the world."
nytimes.com/2018/11/13/bus…
nytimes.com/2018/11/13/bus…
"Critics have derided WeWork as overvalued and vulnerable to the next downturn. But the company holds so many leases in so many cities, it might hold more power than its landlords."
nytimes.com/2018/11/13/bus…
nytimes.com/2018/11/13/bus…
WeWork 2018 earnings out below. Best quote:
"When asked about the impact of slowed economic growth, Gross said: 'We've lived through some level of economic pullback in regions like Latin America and China, but have only seen our growth accelerate'"
axios.com/wework-doubled…
"When asked about the impact of slowed economic growth, Gross said: 'We've lived through some level of economic pullback in regions like Latin America and China, but have only seen our growth accelerate'"
axios.com/wework-doubled…
Other key items are that WeWork essentially has access to $6.6 billion in cash, and also believes 1 of every 8 first-time entrepreneurs are WeWork members (great access for SoftBank?)
axios.com/wework-doubled…
axios.com/wework-doubled…
Good info in here:
-WeWork's Seattle footprint is 1.7M sq ft, up from 900k last summer
-Claims its 4th largest Seattle office occupier, projects 19 offices end of 2019
-Medium-sized and enterprise companies are 80% of total Pacific Northwest membership
geekwire.com/2019/wework-fo…
-WeWork's Seattle footprint is 1.7M sq ft, up from 900k last summer
-Claims its 4th largest Seattle office occupier, projects 19 offices end of 2019
-Medium-sized and enterprise companies are 80% of total Pacific Northwest membership
geekwire.com/2019/wework-fo…
More WeWork numbers:
- Now has over 10,000 employees, plans to hire 6,000 more this year (cut about 300 recently)
- 425 locations across 100 cities in 27 countries
- 400k members; 30% of Fortune 500 companies are WeWork members
geekwire.com/2019/wework-fo…
- Now has over 10,000 employees, plans to hire 6,000 more this year (cut about 300 recently)
- 425 locations across 100 cities in 27 countries
- 400k members; 30% of Fortune 500 companies are WeWork members
geekwire.com/2019/wework-fo…
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