WeWork is opening its wallet to give office brokers bigger cuts if they fill coworking spaces.
The $20 billion startup signed agreements with CBRE, Cushman & Wakefield and JLL in North America, giving their brokers a 20 percent fee on a one-year lease and 5 percent on expansions and renewals, the Commercial Observer reported.
“WeWork is unique in that as we become more sales driven with our real estate approach we can partner with real estate firms on both sides—on the site selection and lease sourcing side and the client member introduction side,” Julia Davis, WeWork’s head of transactions and analytics, told the CO. “We are hoping to leverage those relationships.”
Newmark Knight Frank, on the other hand, has a relationship with WeWork rival Knotel, in which Newmark CEO Barry Gosin is an investor.
Eugene Lee, Knotel’s global director of real estate and business development, said the company is paying standard rates to Newmark brokers, and took a shot at his competitor.
“When you’re having to give promotional commissions and pay brokers to bring you members, that’s generally a sign of weakness,” he said. “In general if you’re discounting and giving out promotional incentives, it’s not a good sign for the business.”
At least one broker was nonplussed by WeWork’s new arrangement.
“It is a minor development,” the broker told the CO. “Not even sure what it means other then we will get a few assignments as will the others to find them space and offer WeWork [spaces] to our clients as an option.” [CO] – Rich Bockmann