NYC office landlords still bullish on WeWork

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 [TRDataCustom] 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