WeWork has sold a $200 million stake in its China business, a move to reduce its long-term exposure to the office market.
The buyer was TrustBridge Partners, an investment firm that previously held a minority stake in WeWork China. With its new majority position, TrustBridge appointed its operating partner, Michael Jiang, as acting CEO of the flexible office provider’s Chinese wing.
“WeWork China has built a business that has cemented WeWork’s position across the region as the market leader in flexible space,” said Sandeep Mathrani, CEO of WeWork, in a press release. “The value proposition and long-term potential for WeWork is increasingly clear as the demand for flexibility at scale comes to the forefront of businesses around the world.”
In New York City, WeWork has also experimented with pay-as-you-go office space to respond to what it sees as an increased need for satellite working spaces for some employees while main offices remain closed.
The move is a far cry from WeWork’s days of rapid expansion under former CEO Adam Neumann, who was pushed out last year; he retained significant profit interests. WeWork, which opened its first China location in 2016, grew to more than 100 locations across 12 cities, with 65,000 members.
The flex-office space provider has been hit hard during the pandemic. WeWork’s New York City vacancy rate is more than 20 percent, nearly double Manhattan’s overall vacancy rate, and the firm recently shuttered its first location ever as it shifts to cost-cutting measures. WeWork has slashed more than 8,000 jobs this year, but is on track to be profitable in 2021, WeWork Chairman Marcelo Claure said in July.