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The Property Industry Is Falling Out of Love with WeWork

bloomberg.com

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Re: The Property Industry Is Falling Out of Love with WeWork

#51

Post by tedivm »

jacquesm wrote: post #46

I absolutely hate WeWork. Due to the nature of our work we have to meet with people there in various locations, the security on-site is laughable but at the same time they make you jump through all kinds of hoops such as photographing you face-first on entry, easily defeated by blocking the camera. The facilities are noisy, distracting, totally unusable to discuss anything that is even remotely confidential and there…

Strong agree. My current company was in one for a few months before we got our own space, and it was one of the most miserable office experiences I've ever encountered. Almost everything about it sucked-

* Their network was grossly misconfigured and directed traffic to the least used access point, regardless of the distance. It was a regular morning ritual for people in my office to toggle their wifi on and off repeatedly until they got a usable connection.

* Network security is also a joke- they have a simple WPA2 shared password that never changes, can easily be brute forced, and is the same at all locations. They do have a proper WPA2 Enterprise setup for their employees, which means the issue isn't their equipment and that they understand the difference between the two.

* They basically have no rules about noise. Their contract refers to the local "communities" rules, but when I asked for them I was told they didn't have any. So when there was bad behavior (which there was plenty of) there was no recourse.

* It was the noisiest office space I've ever worked in. The glass dividers between rooms and open ventilation systems meant there was no insulation from noise at all- and tenants didn't seem to care about letting their entire floor know their business.

* There were only two or three phone rooms per floor, and it was always a fight to get them. People would try and reserve them by leaving their stuff in them before a call, which just amounted to all sorts of drama. Since there weren't enough to go around people would just talk in their offices adding to the noise.

* Allowing dogs is great, but there need to be some rules. One of our neighbors just let his dog walk around the whole floor, so we had to be super careful about what we left in the trash in our unit. He would also leave his dog locked up in his unit while he was getting lunch, and the dog would bark the whole time. People would also have their dogs race from one side of the building to the other. Since none of this was against the rules there was nothing to do about it other than move out.

Re: The Property Industry Is Falling Out of Love with WeWork

#52

Post by gowld »

crazygringo wrote: post #36
pimlottc wrote: post #35

> WeWork forms a subsidiary to represent each lease deal, which means individual locations could fold without leaving the company itself with much risk. The parent company only guarantees the lease for about six to 12 months on a 15-year agreement, according to documents associated with WeWork’s inaugural bond offering. So, they sign a 15-year lease but are only on the hook for the first year? How does that work? Sou…

The subsidiary signs the 15-year lease, not WeWork. So basically if the location turns out to be unprofitable, the subsidiary goes out of business or goes bankrupt and WeWork isn't stuck with the lease. From the landlord's perspective, yes it is basically equivalent to a year lease with option to extend... not totally clear why the landlord would agree to that.

Must be nice to be an immortal corporation that can just spin off any debts you don't want to pay, while mere mortals with finite lifespans and education debt and medical debt and credit card debt cannot unless we die.

Re: The Property Industry Is Falling Out of Love with WeWork

#53

Post by ralph84 »

stevehawk wrote: post #7
turc1656 wrote: post #5

Earlier quoted context omitted.

You forgot the part about disregarding laws/regulations and trying to grow fast enough so that by the time the regulators start to apply pressure you have enough money and clout to fight back, all while preventing the smaller guys from doing the same thing you did. Not saying that WeWork is doing that, but it's definitely a time-honored Silicon Valley approach. Just look at the recent faux pas from Robinhood with the…

Amazon was not unprofitable. They just constantly reinvested their profits back into their company instead of hording cash.

Amazon was certainly unprofitable for their first 15 years or so. As recently as 2009 they had negative retained earnings on their balance sheet.

Re: The Property Industry Is Falling Out of Love with WeWork

#55

Post by chimeracoder »

0x8BADF00D wrote: post #45
Animats wrote: post #37

Uh oh, another overpriced company funded by Softbank. Softbank, remember, is funded by Saudi Arabia's sovereign wealth fund. They're also behind Uber. They seem to be the world's largest source of dumb money. I wonder what the big customer lease deals with WeWork look like. They probably don't get the markup they do with little tenants.

As the recession deepens, WeWork will surely eventually implode. I can see it now: vast swathes of empty commercial real estate. If you thought ghost malls were bad, wait until you see ghost WeWorks.

> As the recession deepens

Deepens? We're not in a recession, and we haven't been for nearly a decade.

It's true that, by historical standards, we're arguably overdue for a recession, but the word "recession" is precisely defined, and the US unambiguously does not meet the criteria for being in one.

Re: The Property Industry Is Falling Out of Love with WeWork

#56

Post by bobthepanda »

a13n wrote: post #43
code4tee wrote: post #40

At the end of the day WeWork is essentially a middle man. If the model catches on landlords can make WeWork irrelevant by just adapting and offering “WeWork” style coworking space thus it’s not clear what the end game of all this is. If it fails it fails. If it succeeds it’s super easy to copy and cut them out of the equation. WeWork as a company is also becoming increasingly unfocused. They’re getting into everythin…

I don't agree that landlords can easily replicate WeWork. First of all WeWork has an incredible brand, and great processes/assets that let them run co-working spaces more profitably. Amazon seems like a counter point to your focus point too.

Do they? What exactly does WeWork offer that a landlord couldn't easily replicate? Amazon at least has the crazy logistics network.

To me, WeWork sounds more like a Moviepass type situation.

Re: The Property Industry Is Falling Out of Love with WeWork

#57

Post by wevisit »

jacquesm wrote: post #46

I absolutely hate WeWork. Due to the nature of our work we have to meet with people there in various locations, the security on-site is laughable but at the same time they make you jump through all kinds of hoops such as photographing you face-first on entry, easily defeated by blocking the camera. The facilities are noisy, distracting, totally unusable to discuss anything that is even remotely confidential and there…

The photograph isn’t for security, it’s to send a notification to the person you’re visiting, they don’t have a problem with you choosing not to be photographed if you’re not comfortable with it. The notification includes your name and the picture because the wework member is expected to walk into the common area and find you, which is difficult if the wework member doesn’t know what you look like!

Re: The Property Industry Is Falling Out of Love with WeWork

#58

Post by tonysdg »

gowld wrote: post #52
crazygringo wrote: post #36

Earlier quoted context omitted.

The subsidiary signs the 15-year lease, not WeWork. So basically if the location turns out to be unprofitable, the subsidiary goes out of business or goes bankrupt and WeWork isn't stuck with the lease. From the landlord's perspective, yes it is basically equivalent to a year lease with option to extend... not totally clear why the landlord would agree to that.

Must be nice to be an immortal corporation that can just spin off any debts you don't want to pay, while mere mortals with finite lifespans and education debt and medical debt and credit card debt cannot unless we die.

Fairly certain at least some of those debts can get passed on to your estate and/or children.

Re: The Property Industry Is Falling Out of Love with WeWork

#59

Post by CptFribble »

a13n wrote: post #43
code4tee wrote: post #40

At the end of the day WeWork is essentially a middle man. If the model catches on landlords can make WeWork irrelevant by just adapting and offering “WeWork” style coworking space thus it’s not clear what the end game of all this is. If it fails it fails. If it succeeds it’s super easy to copy and cut them out of the equation. WeWork as a company is also becoming increasingly unfocused. They’re getting into everythin…

I don't agree that landlords can easily replicate WeWork. First of all WeWork has an incredible brand, and great processes/assets that let them run co-working spaces more profitably. Amazon seems like a counter point to your focus point too.

The comparison to Amazon is a little misplaced, IMO.

Companies like Amazon and Google have more money than $deity and can afford to blow a few billion on non-core-business moonshots like self-driving cars and molten salt energy storage and space rockets.

WeWork does not have more money than $deity, so spinning out into less-related business is a sign of CoreBusinessNotQuiteCuttingTheMustardAnymore-itis.

Re: The Property Industry Is Falling Out of Love with WeWork

#60

Post by wbl »

turc1656 wrote: post #5
sharemywin wrote: post #2

Unicorn playbook: 1. Jump on hot tech trend threatening to disrupt industry 2. pay way too much for customers 3. get lots of VC money and use VC money to pay way too much for more customers 4. grow gargantuan 5. transform into basically every other non-tech big player in the industry because zero marginal cost only works in few industries

You forgot the part about disregarding laws/regulations and trying to grow fast enough so that by the time the regulators start to apply pressure you have enough money and clout to fight back, all while preventing the smaller guys from doing the same thing you did. Not saying that WeWork is doing that, but it's definitely a time-honored Silicon Valley approach. Just look at the recent faux pas from Robinhood with the…

There is nothing illegal about store brands.
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