The WeWork effect

How the $20B company, which started seven years ago with one office, transformed an industry

Aug.August 01, 2017 11:00 AM

There’s never a dull moment at WeWork. In 2014, the New York City real estate industry’s jaw dropped when the office-sharing start-up raised $150 million and hit a valuation of $1.5 billion, suddenly catapulting it into “unicorn status.” But less than a year later, it shocked the business world again with another monster fundraising round and new valuation — this one for $5 billion. And last month, it quadrupled that figure. Since launching with a single 3,000-square-foot Soho office seven years ago, the co-working company has racked up more than 155 locations in 49 cities around the world, from Boston to Buenos Aires to Berlin. Its global footprint now stands at more than 9 million square feet. WeWork’s meteoric rise has also spawned copycat companies in NYC and beyond. Even its largest NYC competitor, Regus, which debuted in 1989 and caters to a more corporate crowd, recently launched a hip new brand called Spaces to rival WeWork. Meanwhile, WeWork — which has expanded into co-living, fitness, construction and other areas — announced a leadership shake-up last month. While CEO Adam Neumann will remain at the helm, his co-founder Miguel McKelvey will take on a new role, and Jen Berrent, the company’s attorney, was named COO. Sources say the move was likely in preparation for the company’s anticipated IPO.

2.9M

The total square footage of WeWork’s 38 NYC locations. The company — which counts IBM and Microsoft among its tenants — has a 45 percent market share in the NYC co-working sector, compared to rival Regus’s 21 percent. In NYC, Regus — a public company now called IWG plc — leases 1.4 million square feet at 46 sites.

A dining area at WeLive in the Financial District.

$3,050

Monthly rent for a studio at WeWork’s WeLive in Fidi. Although co-living spaces have a reputation for being “dorms for adults,” WeLive’s units are a lot like traditional apartments. They all have private bathrooms and kitchens, but they come fully furnished and share common areas and “chef’s kitchens.”

524%

WeWork co-founder and CEO Adam Neumann

The growth in co-working spaces in NYC since 2009. According to Newmark Grubb Knight Frank, there were 25 then. Last month, the New Worker Magazine pegged the number at 156. In addition to WeWork and Regus, co-working companies like the Yard, Coalition, Green Desk and Spark Labs are also players in the sector.

$20 billion

WeWork’s valuation as of July 10, after a $760 million fundraising round. That makes the start-up more valuable than major office landlords such as Boston Properties and Vornado Realty Trust, which are valued at $18.3 billion and $17.7 billion, respectively.

2.8

The average rating out of five that former and current WeWork employees give the firm on workplace review site Glassdoor, suggesting working for WeWork isn’t quite as nice as working at WeWork. The pros and cons listed: The firm rewards ambition and good ideas, but it has poor leadership and pay.

1

UrWork founder Mao Daqing

The number of NYC locations that UrWork, China’s largest co-working company, has in NYC. The Chinese firm — which has 7.5 million square feet of office space at 100 locations in China — just locked in a 34,000-square-foot space at Fosun International’s 28 Liberty in partnership with co-working firm Serendipity Labs.

11,900%

The jump in members WeWork has seen globally since the end of 2010, the year it launched. The company had 1,000 members back then and roughly 120,000 as of June 2017. Members pay an average of $650 a month, which gets them office space and amenities, including booze.


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