What does WeWork actually sell? I mean... what is their source of revenue, or is it just dumb me and it's my own fault that I don't know that?
WeWork Warns of Possible Bankruptcy
41–50 of 150 posts
Re: WeWork Warns of Possible Bankruptcy
#42Earlier quoted context omitted.
They probably enter into long term lease for the building they can’t get out overnight?
Good point - goes to show it’s always easier to criticise behemoths like this from the outside. However, I wager that they have had long enough to plan around this one - _surely_ there are a non-negligible amount of leases they can trade or sell on / do something with as most WeWork locations are in highly desirable spots.
It's a significant money investment to renovate a space for co-working. Also, if you move spaces, you will lose some customers to attrition. There's a lot of overhead... it's not like everyone just teleports to a different building.
Re: WeWork Warns of Possible Bankruptcy
#43Earlier quoted context omitted.
They probably enter into long term lease for the building they can’t get out overnight?
Good point - goes to show it’s always easier to criticise behemoths like this from the outside. However, I wager that they have had long enough to plan around this one - _surely_ there are a non-negligible amount of leases they can trade or sell on / do something with as most WeWork locations are in highly desirable spots.
Commercial leases are usually 7 years. If they bought in during the go-go run in 2018-2019, they've still got years left. Breaking a commercial lease in good times is already very difficult (I was lucky to get out of one a year early in 2019 because I found someone to take it over that the landlord liked). And who would take over or sub the lease today? Everyone is trying to get out of their leases right now because office space is underutilized with WFH.
Re: WeWork Warns of Possible Bankruptcy
#44My company has an office in a London WeWork. They are drastically attempting to control costs, e.g. things like the air con "not working", more like they don't want to turn it on because it's expensive.
I expect that they will renegotiate the lease on this building to more favourable terms. It's either that or the building goes empty.
Re: WeWork Warns of Possible Bankruptcy
#45I go to one about once a week to get out of the house (paying the ad-hoc rate), and they make it impossible to get a membership or even talk about how much a single person office would be (guessing out of my price range, but I actually have money to spend on it so I'd like to talk). Maybe if you could give them money they wouldn't be in trouble.
Re: WeWork Warns of Possible Bankruptcy
#46In my opinion the writing for a way out of this mess has been on the wall for a long time now, post-Covid. This is with the only viable, but still heavily under-utilized product they have left: hot-desking and community workspaces. Having rented multiple dedicated offices from WeWork I can attest that the corridors are become more and more like a post-apocalyptic landscape as the tenants — no longer taking advantage…
Their dedicated office space is just absurdly expensive. I'd pay $2000/month for a 10sqm office when I can get a 20sqm office from the market for $1000/month. Of course the locations are not equivalent, but it's just not really relevant for those of us working remote anyway.
Re: WeWork Warns of Possible Bankruptcy
#47Earlier quoted context omitted.
They probably enter into long term lease for the building they can’t get out overnight?
Good point - goes to show it’s always easier to criticise behemoths like this from the outside. However, I wager that they have had long enough to plan around this one - _surely_ there are a non-negligible amount of leases they can trade or sell on / do something with as most WeWork locations are in highly desirable spots.
You're assuming that they:
a) have long term leases
b) paid a reasonable amount for them
c) those leases can be traded
d) those leases are actually worth enough to be useful.
Re: WeWork Warns of Possible Bankruptcy
#48Earlier quoted context omitted.
Good point - goes to show it’s always easier to criticise behemoths like this from the outside. However, I wager that they have had long enough to plan around this one - _surely_ there are a non-negligible amount of leases they can trade or sell on / do something with as most WeWork locations are in highly desirable spots.
Commercial leases are usually 7 years. If they bought in during the go-go run in 2018-2019, they've still got years left. Breaking a commercial lease in good times is already very difficult (I was lucky to get out of one a year early in 2019 because I found someone to take it over that the landlord liked). And who would take over or sub the lease today? Everyone is trying to get out of their leases right now because…
Also good point. However, while commercial spaces in general are (as you say) underutilized, my gut feel (non-empirical here) from being in large cities is that there is somewhat of a boon for hot-desking / blurred-work-life-balance "office leisure spaces".
Without having your experience of breaking a commercial lease, I would imagine one avenue to explore would be trying to offload some of these leases to emerging companies doing what I refer to above.
Re: WeWork Warns of Possible Bankruptcy
#49I got 3 month for free with WeWork just before covid (hotdesking only). I went there 2-3 times and found it to be a significantly worse working environment than even a starbucks. The chairs were extremely uncomfortable, the acoustics of the room made it noisy. Really didn't see the point and can't imagine how they can get people to use them.
It might be different in other locations but at least the two locations I've visited in Hong Kong were really not great.
Re: WeWork Warns of Possible Bankruptcy
#50What does WeWork actually sell? I mean... what is their source of revenue, or is it just dumb me and it's my own fault that I don't know that?
Working space. You can rent a single desk or multiple, and they charge you money every month. Bog standard stuff, has been done a million times all over the world.
The problem for WeWork is that they chose to grow incredibly fast, positioned themselves a a very high-end premium type of service, and funded it all with lots of debt and VC (mostly SoftBank) investments, despite nearly every financial professional warning them that they were over-exposed and any small disruption to their earnings would cause huge troubles for the company.
Then COVID happened, interest rates started rising and the demand for expensive rented offices dried up. Now they have a ton of bills and not enough paying customers to cover them all.