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One thing that is getting lost in the noise they have like a 40% profit margin and many new properties are profit share with the developer/owner of the property
by qaq 8y ago
One thing that is getting lost in the noise they have like a 40% profit margin and many new properties are profit share with the developer/owner of the property. They are spending very aggressively on expansion but unlike Uber they actually have decent margins.
- bobx11 8y ago40% margin on real estate seems so high. Would you mind sharing your source?
- qaq 8y agohttps://www.youtube.com/watch?v=-EKOV71m-PY https://www.youtube.com/watch?v=-EKOV71m-PY (after reading through the comments decided to learn a bit more and found this interview).
- baybal2 8y agoIt is a very, very generic coworking arrangement. Get A grade space, add services, sublet, rinse, repeat. The coworking industry, a novelty in US, was alive and kicking everywhere else before becoming a hipster trend in US. I'd say, WeWork, with all its colossality, is still only managed to secure single digits of the market share. In the future, it has no chances to approach even, say, 10% as competition is cut throat.
- murukesh_s 8y agoI think that may be one attraction. With relative ease to raise funds in US, they can gobble up other global competitors , especially if the competition is cut throat (so very slim profit margins). They can easily become the dominant player if they can keep raising funds and acquire competitors in few more rounds.
- baybal2 8y agoOne moment here. What if you competitor will not sell itself? The "grand scheme" fails
- djajshgsjja 8y agoWait, how do they have a positive margin at all if they are losing all this money?