The Real Deal New York

WeWork now offers brokers 100% commission. You read that right.

Co-working company hopes to lure tenants away from rivals
August 23, 2018 06:00PM

Adam Neumann (Credit: Getty and Public Domain)

The latest sign that competition in the co-working industry is heating up: WeWork is offering 100-percent commission to brokers who lure tenants away from its rivals.

The move comes a year after WeWork offered tenants at rival coworking companies a year’s free rent if they switch. Because of that, the commission is really just 50 percent of a typical year’s rent, Bloomberg reported. But that’s still five times more than the industry average of 10 percent.

“A year ago WeWork had some of their staff coming to our locations unannounced, posing as prospective customers, taking a tour, walking around, taking pictures of logos of companies they saw, then emailing and calling them directly and offering them discounts,” Amol Sarva, the CEO of WeWork rival Knotel, told Bloomberg. “Now they’ve hired an on-demand plausible-deniability army to do the dirty work.”

CEOs of rival co-working companies say they’ve noticed more brokers cold calling their tenants and offering them a deal at WeWork. According to Bloomberg, the extra commission applies to IWG, Knotel and Industrious tenants.

Last month, WeWork launched its own leasing brokerage and advisory venture WeWork Space Services, which helps those who don’t want to be in a WeWork find an office space.

“I don’t know exactly what WeWork’s intent is,” Industrious CEO Jamie Hodari told Bloomberg. “But I think if you look at the behavior and what their stated plans are, probably the most accurate description is they have a short-term plan with regard to brokers, which is to use them where possible to their advantage, and a long-term plan, which is probably to erase the entire industry.” [Bloomberg]Konrad Putzier