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Why do you assume that? He may be willing to bet on WeWork's viability in ways that other landlords won't. Landlords may have been asking him to personally gua

by jaxn 8y ago

Why do you assume that? He may be willing to bet on WeWork's viability in ways that other landlords won't. Landlords may have been asking him to personally guarantee leases.

ryanmercer 8y ago
>He may be willing to bet on WeWork's viability in ways that other landlords won't. Perhaps, but as someone else in this thread said >The self-leasing strategy + WeWork makes the property value higher (presumably because the rent-ability of the property is proven when a WeWork tenant moves in). Then the property owners can leverage the property. And never mind the fact that he's basically guaranteeing he has a tenant for each building, that will also likely making physical improvements to lure in customers (which will mostly carry over for a future tenant) and effectively building free equity in the property so even if WeWork suddenly folds he can sell the properties at competitive prices and still walk away with a profit. >Landlords may have been asking him to personally guarantee leases. Perhaps with the first location or two but a quick google search shows they've raised billions in funding which would be more than adequate (unless they are growing too fast, which appears to be the case, see below). Now as far as guaranteeing rent here's something interesting >In March 2018, SEC filings indicated that WeWork had raised over $400 million alongside private equity fund The Rhone Group to start a fund to purchase properties directly.[33] In April, documents filed by the company in association with a plan to raise $500 million through the issue of high-yield bonds showed that the company's revenues rose in 2017, but costs rose faster, and the company owed $18 billion rent https://en.wikipedia.org/wiki/WeWork#History_and_funding https://en.wikipedia.org/wiki/WeWork#History_and_funding I don't know how many of the sites he owns but even if it is only 10% there is 1.8 billion 'free' money servicing loans on commercial properties he owns.

by jaxn 8y ago

Why do you assume that? He may be willing to bet on WeWork's viability in ways that other landlords won't. Landlords may have been asking him to personally guarantee leases.

ryanmercer 8y ago

>He may be willing to bet on WeWork's viability in ways that other landlords won't. Perhaps, but as someone else in this thread said >The self-leasing strategy + WeWork makes the property value higher (presumably because the rent-ability of the property is proven when a WeWork tenant moves in). Then the property owners can leverage the property. And never mind the fact that he's basically guaranteeing he has a tenant for each building, that will also likely making physical improvements to lure in customers (which will mostly carry over for a future tenant) and effectively building free equity in the property so even if WeWork suddenly folds he can sell the properties at competitive prices and still walk away with a profit. >Landlords may have been asking him to personally guarantee leases. Perhaps with the first location or two but a quick google search shows they've raised billions in funding which would be more than adequate (unless they are growing too fast, which appears to be the case, see below). Now as far as guaranteeing rent here's something interesting >In March 2018, SEC filings indicated that WeWork had raised over $400 million alongside private equity fund The Rhone Group to start a fund to purchase properties directly.[33] In April, documents filed by the company in association with a plan to raise $500 million through the issue of high-yield bonds showed that the company's revenues rose in 2017, but costs rose faster, and the company owed $18 billion rent https://en.wikipedia.org/wiki/WeWork#History_and_funding https://en.wikipedia.org/wiki/WeWork#History_and_funding I don't know how many of the sites he owns but even if it is only 10% there is 1.8 billion 'free' money servicing loans on commercial properties he owns.