>What some people may not realize is that "executive suites" have been around forever, however they were never looked at as a "hypergrowth" SV/hot startup. Reg

>What some people may not realize is that "executive suites" have been around forever, however they were never looked at as a "hypergrowth" SV/hot startup. Regus was/is the main player in that space, and it certainly wasn't startup territory at all. WeWork took a very different angle to it, as they were looking to capture small startups that wanted to be in a kind of "incubator" type set up. The buildouts and the target clientele were different concepts than had been tried in that market. I'm not saying that WeWork didn't/doesn't have issues, or that the idea was profitable at it's core, but it was a different take and seen as quite "disruptive". >They've also apparently had a business model where they don't own the spaces, so the underlying landlords can squeeze them at any time. WeWork leases have single purpose entities on nearly all their leases with few guarantees from WeWork the company. That basically means that the landlord is holding nothing next to nothing. In fact, it's WeWork that could back out of a lease pretty easily leaving the landlord with little recourse, not the landlords that could squeeze them. And even then, the only squeeze the landlords have would be when renewing a lease, and landlords don't have the upper-hand there at all right now. One of the things that WeWork did was buy up significant chunks of square footage in well located buildings that had trouble filling that square footage, then WeWork offloaded a lot of the initial capital expenditure for the buildouts onto the landlord. Some of these leases had break even points for the landlord outside of 5 years, which is quite long for leases that big. So if WeWork goes under or backs out of a given lease, the landlord is left with a huge amount of space, that they likely can't lease, and will likely take a significant amount of capital to either A) break it up, or B) make it amenable for another company to lease out. That means that the landlords are likely going to give WeWork as long a leash as possible, because they don't want that space back. The writing is on the wall though, and WeWork has been going downhill for years now. It was arguable whether it was a good business model before the pandemic, but I can't imagine it making sense in a post-pandemic world. While WeWork clearly were squandering SV investor money, don't underestimate how much real estate fat cats made out on these deals. They got these seemingly sweetheart WeWork leases on the books, marked up valuations for the remaining space in the building, and sold the dream to other investment firms to make out like bandits.