WeWork rethinking one in five leases

SoftBank valued firm at $2.9M in May

TRD NATIONAL /
Jun.June 03, 2020 11:15 AM
WeWork CEO Sandeep Mathrani detailed the steps WeWork is taking to review its global portfolio (Getty)

WeWork CEO Sandeep Mathrani detailed the steps WeWork is taking to review its global portfolio (Getty)

WeWork may exit or rethink one in five of its leases as the troubled co-working firm slashes expenses and chases profitability.

In a call with Citigroup analysts last month, CEO Sandeep Mathrani detailed the steps WeWork is taking to review its global portfolio, which had 828 locations as of March. According to the Financial Times, the troubled co-working firm has tapped Knight Frank to help restructure its leases in the United Kingdom.

“If I look at the portfolio, like anyone’s portfolio, it’s 80:20. Eighty percent [of WeWork’s leases] are great, 20 percent need to be restructured,” Mathrani said on the call with analysts.

Until last year, WeWork grew at breakneck speed, guaranteeing leases to landlords to secure an ever-growing portfolio of office space. Since its botched IPO, the SoftBank-backed company’s valuation has plunged from $47 billion to just under $3 billion. Mathrani, who took over as CEO in February, is reviewing the entire portfolio.

In Hong Kong, WeWork reduced its footprint by 20 percent, sources told the FT.

Not all shared-space companies are retrenching. IWG recently scooped up a 30,000-square-foot lease that WeWork vacated in March. IWG, formerly known as Regus, recently raised £320 million, or $402.5 million, which it will use to expand, including investing in distressed properties.

In London, WeWork is in talks to reduce its commitment at an office development where it previously agreed to lease 190,000 square feet. In 2017, WeWork committed to leasing two buildings at Cain Hoy Enterprises’ Stage development. Now it may take just one building spanning 70,000 square feet, Bloomberg reported.
[FT, Bloomberg] — E.B. Solomont


Related Articles

arrow_forward_ios
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
WeWork CEO Adam Neumann (Credit: Getty Images and iStock)

WeWork’s side businesses are fizzling

WeWork’s side businesses are fizzling
Sarah Pontius (Credit: Union College)

Another head rolls at WeWork

Another head rolls at WeWork
WeDone: South Beach landlord seeks to evict WeWork for unpaid rent

WeDone: South Beach landlord seeks to evict WeWork for unpaid rent

WeDone: South Beach landlord seeks to evict WeWork for unpaid rent
154 Grand Street and WeWork CEO Sandeep Mathrani (WeWork, Getty)

Where it all started: WeWork to shutter first-ever location

Where it all started: WeWork to shutter first-ever location
A photo illustration of WeWork CEO Sandeep Mathrani and 149 Madison Avenue (Google Maps, Getty)

WeWork abandons big Manhattan office lease

WeWork abandons big Manhattan office lease
Former WeWork CEO Adam Neumann (Getty)

Eliot Spitzer, kibbutz life and tequila: Podcast series delves WeWork story

Eliot Spitzer, kibbutz life and tequila: Podcast series delves WeWork story
After WeWork’s botched IPO, real estate startups have learned to add women to their boards.

“Change is happening”: Inside real estate tech’s race to diversify their boards

“Change is happening”: Inside real estate tech’s race to diversify their boards
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...