Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Property Industry Is Falling Out of Love with WeWork

bloomberg.com

Post reply on HN
Print view View original

111–118 of 118 posts

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

#111

Post by umeshunni »

creato wrote: post #80
0x8BADF00D wrote: post #45

Earlier quoted context omitted.

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.

> If you thought ghost malls were bad, wait until you see ghost WeWorks. Are there really that many locations? I've seen a lot of malls, I've literally never seen a WeWork in person.

Not that many compared to malls. 280 locations, spread across 77 cities in 23 countries. 10M sq ft in total (as of 2017).

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

#112

Post by fjp »

konschubert wrote: post #95
georgewfraser wrote: post #20

Earlier quoted context omitted.

Yeah I would argue this is actually something that drives up WeWork's costs. If you're a smallish business, you'll typically find an office that's already got an acceptable look and leave it alone. But WeWork always renovates their space to a high standard, which is very expensive.

Except that their standard doesn't seem to consider acoustics at all, which is pretty insane to me.

It's amazing what I'm hearing in this thread compared to all the gushing articles a couple years ago about how WeWork had sed "algorithms" to perfect the use of space for the modern worker.

I guess I should get used to the fact that so much journalism is just advertising.

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

#113

Post by turc1656 »

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 most definitely unprofitable until the last few years as a whole. They just continually went back to investors asking for more money with the promise that they'll eventually solidify profits on the books.

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

#114

Post by turc1656 »

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…

If you look at their SEC filings, it is clear that recently (I last looked early in 2018 or late 2017), the retail business was listed as having huge losses. Losses on the order of 15-20% of gross revenue! Meanwhile, AWS was highly profitable at this time and was the reason the company as a whole was finally booking profits with margins of a paltry ~1.3% or so, if I recall correctly. The retail business has never been profitable because of the huge costs of running all those logistics and warehouses and shipping (even with their rock bottom shipping costs).

You may be right about Quill. I don't know enough about it. But regardless, at some point it's clear they surpassed the guidelines of Quill and became liable and are to this day not complying with the law in my opinion.

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

#115

Post by SOLAR_FIELDS »

ddavis wrote: post #13

I was talking to a friend the other day who told me about multiple recent grads from their PhD program joining tech companies that were willing to pay for a shared work space office for remote employees. One said it was significantly cheaper to expand their team with remote employees and offer to pay for WeWork spaces than to expand the physical office space they already had (new hires got to choose what they wanted…

It’s definitely a business model that fills a niche. And it clearly offers value. The problem is that when the economy tanks these sort of arrangements will be the first to go as the tech companies trim expenses and either relocate the employees, fire them, or force them to work from home. It seems at this point that WW has a great offering when everyone has money, but the second the economy turns they are going to be the ones holding the proverbial bag.

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

#116

Post by ksec »

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.

I am not sure if that is evil or pure genius. But why is the subsidiary allowed to release it to WeWork?

I mean by that theory I could open up 100s of Restaurant and close each of them that is not performing?

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

#117

Post by bobthepanda »

scott00 wrote: post #109
bobthepanda wrote: post #56

Earlier quoted context omitted.

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.

Brand loyalty is fickle. Back in the day you could get everything from the Sears catalog and now we all buy from Amazon as Sears trudges through bankruptcy.

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

#118

Post by Scotty123 »

mbesto wrote: post #83
gumby wrote: post #9

Earlier quoted context omitted.

How does this fit with https://www.hanahaus.com which already exists? (note: I've never used Hana though I walked through the one in Palo Alto just out of curiosity, and it simply looked like a random co working space).

HANA Haus is named after SAP's database product HANA. It's more of a coffee get together than a co-working space (unless they've deliberately changed it since I've last been there).

Actually its mainly a coworking space with a blue bottle in the building as well. I got open seating just $3 an hour. Has louder areas or you can reserve quieter spaces/meeting rooms.
Post reply on HN