Well, it happened. Adam Neumann is stepping down.
After weeks of speculation and escalating concern over the We Company’s impending initial public offering, Neumann is taking himself out of the picture (sort of).
“In recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive,” Neumann said in a statement.
He will move into the role of non-executive chairman. According to the Financial Times, Neumann also agreed to greatly diminish the power of his special voting shares and will only control a minority of board appointments.
It’s hard to imagine WeWork without its eccentric founder at the helm, but his ouster isn’t surprising. The We Company had already taken several steps to lessen Neumann’s grip on the company, including reducing his voting power and taking back $5.9 million he received for use of the “We” trademark. A recent Wall Street Journal profile that highlighted Neumann’s erratic behavior surely did not reassure those worried that he retained majority control over the company.
SoftBank’s founder Masayoshi Son was apparently part of a group of investors who wanted Neumann out. In the chorus of rising concern, Son’s voice was likely among the loudest: SoftBank has poured $10 billion into WeWork over the last few years and has yet to release another $1.5 billion it has pledged.
Speaking of departing real estate tech execs, Compass’ chief operating officer is also leaving.
Tuesday was a big day for SoftBank-backed companies. COO Maëlle Gavet is leaving the residential brokerage next month, E.B. Solomont reports. The decision, apparently, was mutual.
“Maëlle will be moving on to focus her attention on a new opportunity outside of Compass,” CEO Robert Reffkin said in a statement. “The company will not be hiring a replacement for her role.”
But sources said tension between Gavet and Reffkin had been mounting over the last few months, with one source commenting that “She was not the Sheryl to his Mark.” If the two had the same workplace setup as last year, they could hardly have avoided each other. In March 2018 Gavet told TRD that she shared an office with Compass’ two co-founders and a desk with Reffkin.
Her departure followed that of others, including head of communications Jason Post, and three executives in marketing and product who resigned or were forced to quit in June amid tension between Reffkin and Gavet.
What we’re thinking about next: What will result from the House’s impeachment inquiry? Send a note to kathryn@therealdeal.com.
CLOSING TIME
Residential: The priciest residential closing recorded Tuesday was for at least six condos at 15 Hudson Yards, at $52 million. William Dalessandro is the buyer and Related Companies and Oxford Properties are the sellers.
Commercial: The most expensive commercial closing of the day was for an apartment building at 495 Amsterdam Avenue on the Upper West Side, at $8.2 million.
BREAKING GROUND
The largest new building filing of the day was for a 3,187-square-foot, two-family home at 11-17 123rd Street in College Point. AAA Realty & Management filed the permit application.
NEW TO THE MARKET
The priciest residential listing to hit the market Tuesday was for a townhouse at 152 Reade Street in Tribeca, at $15 million. Compass’ Brandon Trentham has the listing. — Research by Mary Diduch
A thing we’ve learned…
Boris Johnson was in Hudson Yards? On Tuesday, Johnson gave a speech at the Related Companies’ development as part of his efforts to talk up his post-Brexit plan to U.S. businesses, the Financial Times reports. Thank you to Kevin Sun, who spotted videos on Twitter of Johnson speaking with the Vessel in the background.
Top stories from our other markets:
NATIONAL
A formal impeachment inquiry was launched into President Trump’s conversation with Ukranian President Volodymyr Zelensky, but Trump’s ties to the country extend far beyond that encounter. TRD compiled Trump’s real estate-related ties to Ukraine that have been revealed so far.
CHICAGO
WeWork rival Industrious is growing its footprint in the Loop. The shared workspace provider is expanding at 500 West Madison Street, a 1.5-million-square-foot office tower owned by KBS Realty Advisors. While much of WeWork’s deals are traditional leases with landlords, Industrious inks management agreements with the building owners and finds enterprise clients.
LOS ANGELES
The powerful California Apartment Association lobbied behind the scenes to extend Assembly Bill 1482, what’s being called California’s most sweeping rent control measure in decades. The real estate trade organization had publicly opposed the rent control measure from the start. It backed away from that position when the bill passed the state Senate earlier this month with a 10-year-term, up from its proposed three years.
MIAMI
Motivational speaker and real estate investor Grant Cardone encourages his followers to “10X” their businesses, incomes and lives. Now, Cardone Capital’s $50 million Equity Fund V is oversubscribed and closed as of Friday. The fund, which has invested in multifamily properties, launched in January and was aimed at non-accredited investors. — Compiled by Alexi Friedman