WeWork’s $47 Billion Dream: The Lavishly Funded Startup That Could Disrupt Commercial Real Estate.

With $6.5B in equity funding, WeWork is expanding aggressively at home and abroad and pursuing diverse investments that have raised eyebrows. But its real-estate-as-a-service offering and trove of data on optimal office design could make the company’s value prop far more than a marketing ploy.

WeWork is a real estate company valued like a tech company.

At least, that’s the rap on WeWork from critics who think it can’t support its $47B valuation in private markets.

Backed by Japanese tech and telecom giant SoftBank Group, WeWork specializes in rent arbitrage — leasing and developing properties at one price, then turning around and renting them out at much higher prices. Its recent run-up in funding — raising some $4B in 2018 alone — has given the company the firepower to expand quickly without worrying too much about fundamentals.

Companies traded in public markets that follow the same business model trade at much lower sales multiples than WeWork. Detractors say WeWork has earned its valuation by putting hipster touches on formerly drab spaces and positioning itself as a startup incubator, then charging sky-high rent.

On top of that, critics point to WeWork’s investments in seeming distractions — like its WeGrow elementary school and a wave pool company — as more examples of a tech company with overreaching ambitions. Furthermore, its recent rebrand to The We Company sets the stage for expansion into more sectors including banking, housing, and even sailing.

But WeWork’s shift to safer real estate commitments and its emphasis on longer-term renters and enterprise clients suggest the company could have legs.

WeWork claims it’s amassing a trove of data on ideal office locations and layouts, and using software to determine everything from ideal desk layout to optimal conference room size.

The company is leveraging this data not only to improve its own locations, but also to become an outsourced facilities manager, at a time when big enterprises are trying to shed real estate management from their portfolios. WeWork has already secured IBM and Verizon for its Powered by We offices in Dock 72, a high-profile commercial property in Brooklyn.

WeWork is also pursuing new lease agreements that could help it shed some of its biggest risks, and purchasing high-profile properties outright, giving it much more visibility and real assets. However, recently the company has come under fire for renting properties owned by CEO Adam Neumann, prompting concerns about conflicts of interest.

Get the full 43-page WeWork report. Download the free report on WeWork’s strategy to dominate co-working, and potentially disrupt commercial real estate at large.

In this report, we’ll show you how WeWork is:

Shedding risk by shifting from long-term leases on its properties to real estate deals with much less risky commitments.
Using its data and tech advantage to create a blueprint for optimal office design and superior worker productivity that can’t be easily replicated by other real estate companies.
Turning itself into a real estate services company targeting enterprises.

Do you prefer more information?

Get the full 43-page WeWork report. Download the free report on WeWork’s strategy to dominate co-working, and potentially disrupt commercial real estate at large.

Team up with Obeyo

Looking for help? Get in touch with us