Find Real Estate Agents and Homes for Sale

Real Estate News --> New York News

WeWork co-working spaces disrupt office and real estate market

WeWork, with a whopping valuation by investors of $20 billion, has taken the lead in the co-working space and in the process is disrupting the office and real estate market ... who co-founded the group in 2010 in New York withMiguel McKelvey.

Archived Story

Going to the office isn't what it used to beAs more workers shift to on-demand and “gig” employment, the workplace has changed, and no company has capitalised on this more than WeWorkWith free-flowing beer and coffee, the smartly designed offices that have popped up in dozens of cities in some 20 countries have become coveted by small firms and freelancers in technology and other sectorsWeWork, with a whopping valuation by investors of $20 billion, has taken the lead in the co-working space and in the process is disrupting the office and real estate market“At WeWork, we want to create a world where people work to make a life, not just a living,” says chief executive Adam Neumann, who co-founded the group in 2010 in New York withMiguel McKelveyThose who rent desk space or enclosed offices at WeWork are not just clients, they are members of a “community” under the WeWork credoStarted in New York, WeWork has expanded to some two dozen US cities and around the world in Brazil, Argentina, China, Japan, India, Ireland and Israel, among others, and claims more than 150,000 members.WeWork supplies an internet connection, cleaning service, a reception desk and moreIn San Francisco, the $400 monthly rent offers a workspace in a shared office, while an enclosed office for several people may cost several thousand dollarsThe monthly deals can be particularly attractive to independent workers who don't want to make a long-term commitmentBut WeWork also rents to employees of large firms such as IBM where regional offices are less convenientWeWork's annual revenues have topped $1 billion, according to Neumann, amid speculation the group would launch a public share offeringExpanding perks, activities Steve King, analyst at Emergent Research, said WeWork's strength is building a sense of community, allowing its members to benefit from the network of co-workers from diverse sectorsWeWork offers a mobile application that enables users to contact other members, and be notified of events ranging from cocktail receptions to manicuresExpanding its mission, WeWork has begun a handful of “co-living” spaces that offer some of the same perks, and recently acquired the online social network Meetup -- which keeps members apprised of events ranging from tech networking sessions to sporting events -- and the Flatiron School, which provides online and offline classes and trainingBut WeWork's most visible move came in October with the announcement it would buy the landmark Lord & Taylor store on New York's Fifth Avenue -- vastly increasing its visibility with the historic building that will become its new headquarters, with expanded co-working spaceAs it ramps up its business, WeWork defies categorization“They don't want to be a real estate company because real estate's old and boring, whereas they want to be new and hip,” King saidWhile it's not quite a tech company, “they want to be a tech-enabled company that's creating human interaction,” according to KingWeWork has risen to the top of a crowded field of co-working rivals, and earlier this year got a $4.4 billion capital infusion from Japan's SoftBank Vision Fund“WeWork is disrupting preconceived notions of work styles and opening up myriad opportunities for the next generation of creators around the world by taking a scientific approach that fully utilizes the latest technologies,” said SoftBank chairman and CEO Masayoshi SonThe WeWork model has yet to be tested in a weak economy, and King points out the model carries some risk because WeWork has to buy real estate or sign long-term leases for its space while renting to members on short-term deals“The risk in the leasing model is that if you face a recession, and you've leased long-term and you're selling short term, they could lose a lot of members but still have to pay the lease,” King said“The real estate risk is that they pay too much and won't be able to fill it.” WeWork'shead start however could help it be more resilient, the analyst noted“They always argued that WeWork creates network effect, which is the more members they have, the more valuable they are,” King said.     Email Your NameRecipient Email 0 Advertisement

Trending New York News:

  • CAPFUNDR Launches New Midwestern Multifamily Fund with Hamilton Real Estate Capital
  • My Conflicted Relationship With America’s Biggest Real Estate Company
  • New York County ranked as state’s best for investing in real estate
  • A new problem for the wealthy: Living in a building named 'Trump'
  • Manulife buys building from Ivanhoe Cambridge as part of $555 million in deals
  • Soufun Leads Gain as Chinese Cities Loosen Home Buy Rules
  • U.S. charges 12 family members with defrauding banks of $20 million
  • Jack Rudin, major figure in New York real estate, dies at 92
  • Putting the Mega in Megaprojects: Megamen and Women (Ross, Pinsky, Yaro, Weisbrod) Debate Why Building Big Matters
  • Forum Editor Carranza Joins Women of the Press
  • Creatives at Johannes Leonardo & GDSNY launch #WallThatUnites in New York
  • The Strange Former Lives of New York City Real Estate Brokers
  • Westhampton-Hampton Bays, NY Real Estate: Foreclosures
  • Families at war over New York's most famous pizza joint
  • May Has Been A Blockbuster Month For Luxury Real Estate In New York
  • Inland Sells 970,000-SF Complex
  • NYC now world's most expensive city to live in: Real estate agency
  • Real Estate Activities in South Africa 2016
  • Real estate tycoons’ Top 7 fall projects
  • Real Estate Resume Writing Guide with Template