4 ms·
I never got WeWork because it looked like they onboarded all of a 10-year lease's duration risk and then hoped to make up the difference somehow?
by sklargh 5y ago
I never got WeWork because it looked like they onboarded all of a 10-year lease's duration risk and then hoped to make up the difference somehow?
- erikpukinskis 5y ago> somehow? By marking it up and/or appreciation. They buy it for $500/sqft and then rent it for $100/sqft. In that hypothetical the breakeven is 5 years, plus overhead. If the occupancy doesn’t work out in their favor, they may still make it up in appreciation. What’s a duration risk?