4 ms·

The article states: >"Neumann bought properties and rented them to WeWork" Does anyone know where the money to buy properties came from? Was this his own money

• vkou 7y ago
  Loans backed by his shares in WeWork, and by promises of rental cashflow from letting the properties out to WeWork. This makes a fantastic amount of money for everyone involved, as long as WeWork stock is valued > the price of toilet paper, and as long as demand for shot-term office real estate continues to be high. If either of these assumptions fail to hold, there are going to be very serious problems. There's no conflict of interest in this sort of self-dealing, none whatsoever...
  • bogomipz 7y ago
    Wow - borrowing from Peter to pay Paul. I'm curious if you or anyone else knows who underwrote such a loan? I'm guessing it wasn't a commercial bank? Where does the money come from to do the debt servicing on those loans?
    • vkou 7y ago
      The debt servicing comes from the rental income. You submit to the lender a business plan of how you are going to use the borrower money, how your shares act as collateral, and how you will use the cash flow of the rental income to make interest payments. It's no different then any other corporate loan.