The We Company’s latest play has been revealed: become its own landlord.
The $47 billion flexible-office space startup has launched a private real estate investment arm, ARK, which will buy property and fill it with WeWork services for its enterprise clients, the company said Wednesday.
Wendy Silverstein
The acquisition platform will have nearly $2.9 billion in equity investment. And Ivanhoe Cambridge, a real estate subsidiary of Caisse de dépôt et placement du Québec, will provide ARK with $1 billion, according to Bloomberg. Wendy Silverstein, formerly of New York REIT, will co-lead the platform as chief investment officer alongside Rich Gomel, an executive at WeWork who will now serve as the fund’s managing partner.
While the company did not disclose where it would initially target investments, The Real Deal first reported on the existence of the fund in November, as it neared a deal to purchase a 4.4-acre development site in Austin.
The company said that ARK would merge with WeWork Property Advisors and serve as a subsidiary of the We Company. WeWork Property Advisors, a vehicle managed by the We Company and private equity firm Rhône Group, paid $850 million for the Lord & Taylor building at 424 Fifth Avenue earlier this year. ARK will be chaired by Steven Langman, a managing director of Rhône Group and a board member of the We Company.
Gomel said the fund will “allow us to provide different partnership options for the real estate community.”
The launch of the investment fund comes as the We Company moves toward an initial public offering. To commit to its fiduciary duty to investors, the company’s CEO and founder Adam Neumann told Bloomberg that ARK would be governed by an independent investment committee to solve any conflicts of interest.
Neumann, who has purchased buildings personally and then rented them out to WeWork, said that he would sell those buildings to ARK at the same price he paid for them, according to the Bloomberg report.