WeWork lease-signing sinks to five-year low in New York

Number of new deals in major markets shrunk in final quarter of 2019

WeWork co-CEOs Sebastian Gunningham and Artie Minson (Credit: Getty Images, iStock, Twitter)
WeWork co-CEOs Sebastian Gunningham and Artie Minson (Credit: Getty Images, iStock, Twitter)

WeWork appears to be pulling back in two major markets after a chaotic close to the year.

The number of leases it signed in New York and London slumped in the final quarter of 2019, Bloomberg reports, citing data from CoStar Group.

The 64,000 square feet of space WeWork leased in Manhattan represented the lowest in more than five years. In London, its 49,000 square feet leased were the fewest since the 2016 Brexit vote.

The slowdown followed a turbulent period after a botched initial public offering attempt in September led to the departure of CEO Adam Neumann, layoffs and a rescue package from SoftBank, which then took majority control of the humbled company.

In the lead-up to the planned IPO, the company signed a flurry of lease agreements, reportedly in an effort to impress investors. But the offering was canceled amid concerns over Neumann’s management and personal deal-making and the company’s forecast of losses as far as the eye could see.

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Although the company’s new leaders are paring back its aggressive expansion, WeWork pointed out that it is still growing.

“Following a month of record new building openings in December, WeWork continues to grow our community globally, including in top markets like New York and London,” a spokeswoman told Bloomberg by email.

“The company is focused on profitable growth and expects to expand through new leases as well as asset-light strategies such as joint ventures and management agreements.”

[Bloomberg] — Sylvia Varnham O’Regan