VC-Real Estate: WeWork Leasing Numbers Tanked After Failed IPO

January 16, 2020 | Investments, News, Real Estate

A new CBRE report reveals that WeWork only signed four leases in the fourth quarter.

WeWork leasing numbers plunged in the wake of its failed IPO. A new report from CBRE reveals that the company saw a 93% decline in leasing activity in the fourth quarter. That period coincided with a massive bailout by SoftBank and the departure of WeWork’s founder.

According to CBRE data, WeWork only leased 184,022 square feet during the quarter. That is a massive decline from an average of 2.54 million square feet during the previous four quarters.

The decline in WeWork leasing activity created an opening for its competitors. It yielded its top spot in the work-sharing space to rival Spaces, which saw a 10.7% increase in leasing activity.

“Spaces, WeWork, Industrious and Knotel remained the largest lessees of new space in Q4, but all except Spaces leased significantly less space than their quarterly totals over the past year,” CBRE reported.

What WeWork Leasing Numbers Mean

Softbank took over WeWork in October after a $5 billion bailout package. Since September, the company has slashed 19% of its workforce, divested non-core assets, and jettisoned its founder Adam Neumann.

The former CEO resigned shortly after the firm filed its S-1, which earned remarkable criticism over its profitability projections and the state of corporate governance. Neumann walked away with an exit package valued at up to $1.7 billion.

The latest numbers raise concerns about the sustainability of WeWork’s business today and in the future. At the time of its S-1, it had eye-popping unfunded liabilities. The firm had signed significant long-term leases, yet serviced startups and small- to mid-sized businesses that averaged leases in the range of fewer than two years.

Hedge fund manager Bill Ackman has become a vocal critic of the company’s business model. In October, Ackman said that Softbank should have walked away from its investment.

“I think WeWork has a pretty high probability of being a zero for the equity, as well as for the debt,” Ackman said at the time.

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.

Alt Insights

January 29, 2020

Venture Capital: The Kobe in “Bryant Stibel & Co”

Venture Capital: The Kobe in “Bryant Stibel & Co”

Latest Alternative Investment News
ESG: Graham Clapp Says ESG-Focus is Creating a New Bubble
February 27, 2020     ESG and Sustainability, News

RWC Partners fund manager Graham Clapp warned that sustainable investing trends are poised to form a possible bubble in the markets. He compared it to the tech boom of the 1990s….
Hedge Fund: Whitney Tilson Pumps Berkshire Hathaway as Top Retirement Stock
February 27, 2020     Hedge Funds, News

Former hedge fund manager Whitney Tilson has called Berkshire Hathaway (NYSE: BRK.A) the to retirement stock. Tilson, who now writes for Empire Financial Research, issued a note this week praising…
Liquid Alternatives: Invesco Launches New Sterling Corporate Bond ETF With ESG

Invesco, the fund manager with $1.23 trillion in assets under management as of December 31, 2019, has launched in Europe a new, first-of-its-kind, sterling-denominated, corporate bond ETF with an ESG…
Digital Assets: The SIX Swiss Exchange Buys A Stake in Crypto Trading Platform Omniex
February 27, 2020     Digital Assets, News

SIX Swiss Exchange announced it had struck a partnership agreement last week with San Francisco-based Omniex. The financial terms of the agreement, which also includes the acquisition of a stake…

Scroll to Top