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I would say those landlords are going to be in for an even bigger shock.
by danieltillett 7y ago
I would say those landlords are going to be in for an even bigger shock.
- chisleu 7y agoApparently the CEO owns a bunch of the places and leases them to the company.
- knd775 7y agoAnd he bought those with money he pulled out of the company.
- notyourday 7y ago> I would say those landlords are going to be in for an even bigger shock. Not at all. We is a player in major markets that are populated by professional landlords that have been in this business for much longer than the founder of WeWorks has been alive and have seen it all before, dressed in different clothes. At the end of the day, the class A/B/C buildings as well as the lots they sit on and the air rights above them are real appreciating assets, while the tenants are just the revenue stream for opex.
- lordnacho 7y agoIf WeWork goes broke it's mildly annoying to have to find other tenants, it's true. But it's not like they can't plan for that. For instance if WeWork goes down, there are still tenants that might want to stay in the building. That's a sensible place to start.
- Traster 7y agoThe tenants who want to stay in the building aren't going to be paying the same private equity subsidized prices that WeWork were. I'd imagine in some markets wework is such a big customer now that their collapse would cause massive repercussions.
- tomatocracy 7y agoIn a default scenario, the temptation for the building owners and ultimate tenants to cut bilateral deals and screw over the middle man (WeWork) would be huge. For the owner it's win-win - they keep cashflow coming in and if the deal remains short term then they can replace the tenant with someone who will sign a longer-term lease once markets recover fairly easily.
- santiagogo 7y agoI know one landlord who rented several buildings to them and he understands the risks perfectly, but says the price per sq/ft he's getting paid is so good that even if they blow up within 3 years it's still a great deal.
- danieltillett 7y agoCurious to know what the landlords think of Wework’s prospects. Does he think they are going to blow up soon?
- santiagogo 7y agoHonestly I don’t think he cares/understands that much, but he’s pretty excited about the coworking trend in general and thinks it’s not going away.