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Color me not convinced. They have a lot of leases. It’s top of market and they’re still subsidizing their customers. Won’t actually have leverage against a host
by jvagner 7y ago
Color me not convinced. They have a lot of leases. It’s top of market and they’re still subsidizing their customers. Won’t actually have leverage against a host of major real estate debtors. Nor will it be easy for them to sign newer leases again when that recession ends. And “we’ll just default” is a terrible story to tell during the road show.
- wpietri 7y agoYeah, same. Companies like Uber have a massive power and information advantage negotiating with their contractors (who have taken on a lot of Uber's financial risk). But commercial landlords are a whole different deal. They have seen it all, are experienced in weathering the vagaries of the market over long time scales, and are really not interested in being a sucker. I also suspect WeWork doing deals with larger companies is not going to help them much in a downturn, because they are likely to be savvy players as well. If WeWork is threatening to default on a space, I'm sure there will be corporate office teams from stable industries saying, "Oh, we'll take that nicely built out space, thanks."