WeWork, Rhone Group raise hundreds of millions for property investment fund

Los Angeles /
May.May 08, 2017 10:30 AM

From TRD New York: WeWork and private equity firm Rhone Group raised several hundred million dollars for a real estate investment fund, according to sources.

The partners have already approached New York landlords about buying properties where the co-working company is a tenant, brokers say, although no deal appears imminent. Fundraising for the vehicle, dubbed WeWork Property Investors, is still ongoing.

The Real Deal first reported in October that WeWork was working on an investment fund. Buying into its properties would allow the co-working company to benefit from property appreciation it says it creates as a tenant.

On March 9, the company filed offering documents for four private equity funds — WeWork Property Investors and WeWork Property Investors Funds A, B and B-1 — with the Securities and Exchange Commission. It wasn’t immediately clear which of the funds the partners are currently raising money for. The filings list several WeWork and Rhone executives as fund directors, as Axios first reported.

WeWork declined to comment for this story, citing SEC rules. Rhone did not immediately respond to a request for comment.

Rhone, founded in 1995 by Wall Street veterans Robert Agostinelli and Steven Langman, is a global private equity firm with offices in New York, London and Paris.

WeWork recently landed a $300 million investment from Japan’s SoftBank, reportedly valuing it at more than $17 billion. The company has been signing leases for new co-working spaces in New York at a rapid clip and currently has 38 locations in the Big Apple, according to its website. Earlier this year it shook up its company structure to give it a more corporate shape and hired Starwood Capital veteran Richard Gomel to head its co-working business.  The SEC filings list Gomel as one of the investment funds’ directors, along with Gross and CEO Adam Neumann.

Woody Heller, an investment sales broker at Savills Studley, said the fund’s success will depend on whether enough investors trust WeWork’s credit and are fine with buying into properties where it occupies a big chunk of space. But the fund could put WeWork in a good position when it comes to competing for properties: it wouldn’t have to worry about raising money, and it would already have a big tenant lined up (itself). “If I’m them,” he said, “I would be doing it.”


Related Articles

arrow_forward_ios
From left: Related California’s Gino Canori and William Witte with 710 Broadway (710 Broadway, Getty, Related)
Related scores $385M in financing for Santa Monica mixed-use project
Related scores $385M in financing for Santa Monica mixed-use project
Onni Group’s Rossano De Cotiis and Wilshire Courtyard at 5700-5750 Wilshire Boulevard in Los Angeles
Onni leases 225K sf of offices in Mid-Wilshire to Sony Pictures
Onni leases 225K sf of offices in Mid-Wilshire to Sony Pictures
Simon Property Group's David Simon, Brea Mall at 1065 Brea Mall (Getty, Google Maps, Simon Property Group)
Simon seeks to redevelop former Sears site at Brea Mall
Simon seeks to redevelop former Sears site at Brea Mall
CBRE's Stew Weston with rendering of 1011 North Sycamore Avenue
CIM to build offices on West Hollywood cement plant site
CIM to build offices on West Hollywood cement plant site
Bed, Bath & Beyond's Sue Gove with 14351 Hindry Avenue
Bed Bath & Beyond to close seven more stores across SoCal
Bed Bath & Beyond to close seven more stores across SoCal
Griffin Living's Paul Griffin III and Griffin Plaza at 3885-3977 Cochran Street in Simi Valley
Griffin Living sells Simi Valley shopping center for $22M
Griffin Living sells Simi Valley shopping center for $22M
TGS Management's Fred Taylor and FivePoint's Daniel Hedigan
TGS Management pays $240M to buy 42 acres for Irvine data hub
TGS Management pays $240M to buy 42 acres for Irvine data hub
Susan Phillips, a professor of environmental analysis and director of Pitzer College’s Robert Redford Conservancy for Southern California Sustainability and San Bernardino County Supervisor Curt Hagman with warehouses in San Bernardino county
IE warehouse boom generates call for building moratorium
IE warehouse boom generates call for building moratorium
arrow_forward_ios

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

Loading...