3 ms·
Their business model is not complicated. They arbitrage office space. Office space is expensive to rent (operationally), takes a long time to find a tenant, and
by mtanski 9y ago
Their business model is not complicated. They arbitrage office space. Office space is expensive to rent (operationally), takes a long time to find a tenant, and there's a lot of different kinds of leases (short/long term) and most office management companies are not equipped to deal with 100s of tenants in a single space. Similarly there's lots of pain points when you're the trnter, in terms of finding the space which can be time consuming, deposits, contract negotiations, needing to setup utilities (esp internet).
Wework opertionalizes all of things putting them in position of being able to arbitrage this disconnect in the market.
- dalbasal 9y agoI think that's stretching the definition of arbitrage. It's arbitrage in the sense that a hotel is.
- mtanski 9y agoHow's that? Weworks is buying in one market and reselling (with value adds) in a different market and profiting off this difference. They lease large commercial (multi-story) offices from owners and building management companies and rent out to 100s of small businesses in the same space.