The Real Deal New York

Don’t look now, but WeWork might be raising even more money: reports

Company held talks with Israeli firms about potential bond sale
November 27, 2017 11:00AM

From left: Ariel Tiger, Adam Neumann, and the Tel Aviv Stock Exchange building (Credit: Getty Images)

WeWork already raised more than $6 billion from investors, but that doesn’t seem to be enough. Last week the company’s executives held talks with Israeli institutions about raising hundreds of millions through bond sales in Israel, according to local news reports.

The Marker reported Friday that WeWork’s top brass met with representatives from the investment firms Meitav Dash, Menora Mivtachim Group and Phoenix and that financial services firm Discount Capital Underwriting is helping it with a potential debt offering.

Ctech reported that the company’s CFO Ariel Tiger and its Israel head Benjy Singer took part in the meetings. “At first it was odd that a company with so much money would come to Israel to meet with investors,” a representative of one of the investors told the publication. “When we saw and understood the plans they have for the future, we came to see that they need a lot of funding and that the Israeli capital market is also a destination for them–seeking us as investment partners in real estate projects abroad and as a possible source of funding for other private endeavors.”

Haaretz reported that WeWork, which was co-founded by Israel native Adam Neumann, hasn’t made a final decision on whether it wants to go through with a bond sale, or how much money it potentially wants to raise.

Ronen Geles, an executive at Discount Capital, told The Real Deal that WeWork’s executives spent two days in Israel to meet with investors and learn about the local market. “There is no definite plan for now or any process in motion,” he said, adding that Israeli investors view WeWork as a company with strong connections to the country.

In August, the co-working giant announced a $4.4 billion investment from Japanese conglomerate Softbank, earmarked in part for its planned expansion into Asia. The company had previously raised around $1.7 billion from investors, including Benchmark Capital, Hony Group and Goldman Sachs, according to Crunchbase.

WeWork has been adding new coworking locations at a rapid clip and is expanding into new business lines. The company opened its first Rise by We gym in October, announced plans for an elementary school and acquired the coding school Flatiron School. It is also quietly working on a push into retail, as TRD first reported last week.

Earlier this year, WeWork launched a real estate investment fund in partnership with private equity firm Rhone Group. The two firms dished out $850 million for the Lord & Taylor building on Fifth Avenue last month.

The Israeli bond market is a popular source of funding for New York real estate investors. — Konrad Putzier