3 ms·

I wonder too, but I do see some possibilities: 1) The brand has value. Sure, making an empty space into a co-working space is not that hard. However, how do

I wonder too, but I do see some possibilities: 1) The brand has value. Sure, making an empty space into a co-working space is not that hard. However, how do you market that? How do you get potential workers to know about your space, and choose to work there? If WeWork or Impact Hub are the known brands, people will search there first, and never find you. 2) They may also be exploiting information asymmetry between the high-cost and low-cost areas. If a company in NYC or SF is used to paying $50/sqft/mo ($500/mo for just 10sqft) for space alone plus utilities, etc., they may not really balk at $500/mo for the co-working space used by a remote employee. Sure, those companies know they're getting fleeced compared to regular costs in those cities, but they may also not care, as it's not worth it to economize for just a few employees, and when it gets to many, they just negotiate a bulk deal with WeWork.

sonnyblarney 8y ago
I think the brand surely has value, but not $30Billion worth of value. It's like a clothing line brand or something, i.e. you might trust it more, might be willing to open offices remotely there just because your familiar with it. There is no 'asymmetry' in commercial real-estate really ... prices are well known and watched in every town. Do a little running around in any town and you get a pretty good idea very quickly. Also, they are loosing a huge ball of money. The BI article hints at 'dot-com bubble trouble' and I believe it for this one ... the economics look bad and it could crash. If this goes, and say, Tesla pops ... it could be really bad because the 'crypto coin' thing is essentially a bubble of sort (by that I mean fuelled by speculation) and that could come crashing down very easily and quickly as well. There is also an AI bubble (AI is here to stay, but companies/valuations are whack) that needs a correction. So long as the US economy stays good ... maybe all of this will hold, but some douche-bags are going to just make 'one lie too far' and things will get gummed up for a lot of otherwise good companies.
- empath75 8y ago
  Add uber to that list.
  - sonnyblarney 8y ago
    Uber may be overvalued but they are viable on some level - so they won't go out of business, just investors will get hit. Tesla needs cash, and if they can't get it, they could fail. Or be massively downsized. WW needs cash badly, if they don't raise ... it will crash.
    - CamperBob2 8y ago
      WW needs cash badly, if they don't raise ... it will crash. I don't know about that. The relationship between WeWork and the building owners may be co-dependent rather than merely symbiotic. If you owe $10,000,000 in rent, you have a problem. If you owe $10,000,000,000 in rent, the landlord has a problem.
      - microtherion 8y ago
        Not sure to what extent this holds when you owe $10M each to 1000 different landlords, though (I have no idea how many different landlords they are dealing with).

sonnyblarney 8y ago

I think the brand surely has value, but not $30Billion worth of value. It's like a clothing line brand or something, i.e. you might trust it more, might be willing to open offices remotely there just because your familiar with it. There is no 'asymmetry' in commercial real-estate really ... prices are well known and watched in every town. Do a little running around in any town and you get a pretty good idea very quickly. Also, they are loosing a huge ball of money. The BI article hints at 'dot-com bubble trouble' and I believe it for this one ... the economics look bad and it could crash. If this goes, and say, Tesla pops ... it could be really bad because the 'crypto coin' thing is essentially a bubble of sort (by that I mean fuelled by speculation) and that could come crashing down very easily and quickly as well. There is also an AI bubble (AI is here to stay, but companies/valuations are whack) that needs a correction. So long as the US economy stays good ... maybe all of this will hold, but some douche-bags are going to just make 'one lie too far' and things will get gummed up for a lot of otherwise good companies.

empath75 8y ago
Add uber to that list.
- sonnyblarney 8y ago
  Uber may be overvalued but they are viable on some level - so they won't go out of business, just investors will get hit. Tesla needs cash, and if they can't get it, they could fail. Or be massively downsized. WW needs cash badly, if they don't raise ... it will crash.
  - CamperBob2 8y ago
    WW needs cash badly, if they don't raise ... it will crash. I don't know about that. The relationship between WeWork and the building owners may be co-dependent rather than merely symbiotic. If you owe $10,000,000 in rent, you have a problem. If you owe $10,000,000,000 in rent, the landlord has a problem.
    - microtherion 8y ago
      Not sure to what extent this holds when you owe $10M each to 1000 different landlords, though (I have no idea how many different landlords they are dealing with).