NYC office landlords still bullish on WeWork

“I can’t see any reason why they should go belly up”: Larry Silverstein

New York /
Oct.October 18, 2016 10:00 AM

WeWork may be lagging behind its own ambitious growth targets in 2016, but New York’s real estate bigwigs still believe the co-working company has a bright future.

WeWork TRData LogoTINY is doing very well. They’re in a number of locations with significant investment in each of those locations,” developer Larry Silverstein told the Commercial Observer. “I can’t see any reason why they should go belly up. I hope they don’t.”

Jonathan Simon, CEO of Simon Baron Development, is also bullish on the firm’s business model but skeptical of its valuation, which hit $16.9 billion last week after a $260 million cash infusion. “They provide a very unique product. They may be overvalued in the short run, but the model should continue to work,” he said. “I wouldn’t be surprised if the valuation goes from $16 billion down to $4 billion overnight.”

In July, The Real Deal broke down the logic behind WeWork’s valuation, which stood at $16 billion at the time. Earlier this year, the company slashed its 2016 profit forecast by 78 percent.

Several property owners told the CO that even if WeWork were to fade away, the coworking concept is likely to stay. “If (WeWork) is ahead of its time, a successor will likely follow,” ABS Partners’ Gregg Schenker said.

The Real Deal reported on Friday that WeWork is working on an investment vehicle to buy office and residential properties.  That could potentially put the company in competition with some of the office landlords it is currently leasing space from. [CO]Konrad Putzier 


Related Articles

arrow_forward_ios
Wendy Silverstein (Credit: Getty Images)
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
WeWork CEO Adam Neumann (Credit: Getty Images and iStock)
WeWork’s side businesses are fizzling
WeWork’s side businesses are fizzling
Sarah Pontius (Credit: Union College)
Another head rolls at WeWork
Another head rolls at WeWork
WeWork's Sandeep Mathrani (Getty; Illustration by The Real Deal)
Short sellers make their move on WeWork
Short sellers make their move on WeWork
From left: A photo illustration of Industrious' Jamie Hodari, IWG founder Mark Dixon, WeWork CEO Sandeep Mathrani (Getty, Industrious, IWG, WeWork)
The 10 largest co-working operators of 2022
The 10 largest co-working operators of 2022
Alex Sapir, WeWork CEO Sandeep Mathrani, Adam Neumann and 261 Madison Avenue (Getty, 261 Madison Avenue via Sapir Organization)
Sapir: WeWork hiding behind shell companies in lease dispute
Sapir: WeWork hiding behind shell companies in lease dispute
From left: Silverstein Properties CEO Marty Burger; BedRock Real Estate Partners co-founder Tracey Applebaum; Council member Julie Won; a rendering of Innovation QNS in Astoria (Getty, BedRock Real Estate Partners, New York City Council)
Council approves Silverstein, BedRock’s $2B Innovation QNS
Council approves Silverstein, BedRock’s $2B Innovation QNS
Mayor Eric Adams and Governor Kathy Hochul with Innovation QNS (Getty, Innovation QNS)
Will Innovation QNS happen without 421a?
Will Innovation QNS happen without 421a?
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...