The Property Industry Is Falling Out of Love with WeWork • Hacker News Board

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

#101

Post by edanm » Thu, Dec 20, 2018, 9:58 AM UTC

resg4mp wrote: post #70

Their business model reminds me of MoviePass in the sense that it appears unsustainable, and that their main plan is to grow fast until they have market power to throw around. At least the math for WeWork isn't so obviously flawed as Moviepass was. I'm just disappointed at how many companies use this playbook in the startup world. Everyone just does stupid crap in hopes of becoming the "dominant platform", at which p…

Or, think about it in a more positive way - companies like WeWork take money from investors, and pass it on to consumers, via subsidised pricing. I'm very happy to have cheaper office space, if only for a few years, until VC money dries up (although I have no idea if that is actually the case with WeWork).

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

#102

Post by blackstrips » Thu, Dec 20, 2018, 10:45 AM UTC

dsr_ wrote: post #47

donedeals wrote: post #39

Earlier quoted context omitted.

Wework Brooklyn #22 LLC signs the lease with the landlord and thus is responsible for the lease obligations. Wework LLC (proper) guarantees these lease payments for only 6- 12 months of the lease. After this time the only party responsible for the lease is the LLC that was formed. Landlords are likely agreeing to this only because Wework would never be able to sign a lease with any owner if they defaulted on a locati…

Which sets them up for WeWork subsidiaries to default on any building that's more than X months old and unprofitable. That's a terrible deal for the landlord, if the landlord priced it as a 15 year deal instead of a one year. Absolutely great for WeWork. Terrible for anyone who wants offices, since WeWork will sit on a large chunk of the market.

Maybe WeWork is picking up left-over locations. Some rent is better than no rent.

If the landlord could find a better tenant, WeWork would have zero chance to rent any of it.

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

#103

Post by kgwgk » Thu, Dec 20, 2018, 11:14 AM UTC

a13n wrote: post #94

kgwgk wrote: post #93

Earlier quoted context omitted.

Why would anyone want to work at WeWork at twice the price?

Network of people working there, perks, quality, brand. Why do people do anything for twice the price?

Perks and quality are replicable if they are critical and I’m not sure brand is worth anything at all.

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

#104

Post by code4tee » Thu, Dec 20, 2018, 12:37 PM UTC

a13n wrote: post #94

kgwgk wrote: post #93

Earlier quoted context omitted.

Why would anyone want to work at WeWork at twice the price?

Network of people working there, perks, quality, brand. Why do people do anything for twice the price?

People just want a nice place to work at a decent price. There is no brand loyalty in this space. If someone has a nice product next door people will move. Same as Uber vs Lyft. Nobody cares what logo is on the car.

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

#105

Post by sharemywin » Thu, Dec 20, 2018, 1:32 PM UTC

gamblor956 wrote: post #8

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…

Same for companies like Amazon. Grow super fast and ignore tax laws regarding nexus so you don't pay sales tax. Need to point out that Amazon did not ignore tax laws regarding nexus. They took advantage of a Supreme Court decision on nexus laws ( Quill ) that resulted in them not having nexus in most states. They were forced to change their stance because at some point it was clear that they had surpassed the Quill f…

Was AWS subsidized with retail earnings or they were flush with investor cash which allowed them to invest in AWS?

They also bought a huge warehouse footprint, too.

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

#106

Post by justtopost » Thu, Dec 20, 2018, 2:34 PM UTC

jacquesm wrote: post #44

danieltillett wrote: post #42

Earlier quoted context omitted.

Will be interesting to see what happens if the oil price stays down. Even dumb money can't spend what it doesn't have.

It will take a long long time to spend that money, even in a dumb way.

War is suprisingly expensive

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

#107

Post by SOLAR_FIELDS » Thu, Dec 20, 2018, 3:24 PM UTC

rorykoehler wrote: post #90

pl0x wrote: post #66

WeWork is on their way to collapsing. The company is cult like with founders who have a god complex. Softbank and Saudi funding have saved them from collapse.

When I was running a coworking space in Berlin back in the day WeWork were just getting started. I went to NYC on a holiday and decided to contact all the coworking spaces for networking purposes. Miguel McKelvey one of 2 cofounders of WeWork was the only person to get back to me. I found him exceptionally humble and approachable. Not sure where you got your impressions on the founders from?

Probably from this article that made the rounds a few months ago: https://www.propertyweek.com/insight/the-cult-of-wework/5098...

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

#108

Post by rchaud » Thu, Dec 20, 2018, 4:42 PM UTC

WeWork and Uber seem to be two examples of companies that "look" successful purely on the basis of enormous amounts of VC subsidization. They lose hundreds of millions each quarter because they're under pricing their service to gain market share.

In order to get more funding rounds and ever-higher valuations, they're promising pie-in-the-sky visions of WeWork daycare and schools, or Uber-powered autonomous truck fleets. And when the water goes out of that tide, they quietly announce very 20th century-sounding initiatives like property brokering and sharing zip scooters and offering food delivery.

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

#109

Post by scott00 » Thu, Dec 20, 2018, 4:48 PM UTC

bobthepanda wrote: post #56

a13n wrote: post #43

Earlier quoted context omitted.

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.

The way the brand and scale turns into a moat and/or pricing power is through lower customer acquisition costs than less notable competitors. If everybody who wants shared office space googles WeWork to find it, it's going to be an uphill battle for other operators to get noticed.

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

#110

Post by skh » Thu, Dec 20, 2018, 5:58 PM UTC

kgwgk wrote: post #92

skh wrote: post #85

Earlier quoted context omitted.

In some states for certain medical expenses family members can be forced to assume the debt.

Interesting. But strictly speaking you’re not inheriting debt. You were liable for the debt all the time.

I would agree with that assessment but for the fact that while alive the parent's medical debt can't be forced upon family members. It's a weird debt and I agree it isn't quite the same as inheriting it but I also think it isn't the same a jointly assumed liability while the parent is alive. The family members presumably have no say in whether or not the parent assumes the medical debt.