WeWork’s Decay: Breaking the Wall in Commercial Real Estate, and Expected Losses due to a Static New Low for WeWork
WeWorkâs demise is a blow for landlords who have leased a large proportion of their space to the company. Many landlords have accepted lower rents from WeWork in recent years due to their bad credit and some are struggling with the debt on their buildings. There has been one of the worst crunch in commercial real estate in decades because of the fewer employees that have gone into the office.
The value of the company fell to less than $45 million as of Friday, and its stock has fallen more than 98% since the start of the year. At its peak, in January 2019, the company was worth around $47 billion.
In its bankruptcy petition, the company listed about $15 billion in assets and more than $18 billion in debt. There’s around 100 million dollars in unpayed rent.
The bankruptcy filing marks a staggering new low for the company, which at its heyday won billions of dollars in funding from deep-pocketed investors for putting a Silicon Valley spin on the less-flashy business of subleasing office space to workers.
Adam Neumann’s WeWork: Building an Effective Worklife on a Long-Term Leashed Office Space in an Erratic, Flavored and Occasionally-Barefoot Startup
Erratic, flamboyant and sometimes-barefoot founder Adam Neumann launched WeWork in 2010. At a rapid pace, it tried to change the way people work, a lofty goal that was never fully realized.
WeWork spent a lot of money trying to make money on short-term subleases, and remodeling offices all over the world on long-term leases.
It scrambled to renegotiate lease terms with landlords. But it faced increased competition in the world of short-term office space. And with many office workers choosing to work from home, the company failed to regain its footing.
He cut costs and laid off employees as he steered Wework, an especially punishing time for companies in the business of leasing out office space.
