So, WeWork then. As the dust settles on whatever has happened, some lessons may be emerging. Many of them are presented in this comment in The Economist and this piece in The Intelligencer in which Scott Galloway of NYU Business School claims that the problems have been evident for a long time. He doesn’t hold back.
[Adam Neumann} and [investor] SoftBank entered into a suicide pact, and he jumped out of the plane before it hit the ground. He pulled the rip cord. He has exited the suicide pact with $740 million, and everyone else gets to ride this out to its logical end, which will likely be a bankruptcy file…
They’ve got it wrong. Adam Neumann came in, smoked his own supply, and walked out with three-quarters of a billion dollars about the time that people in hazmat suits showed up. It’s like the guy at Chernobyl who refused to believe what was going on was given three-quarters of a billion dollars to leave before shit got real. That’s what happened here. So, he and his family will literally have to go into hiding. There will be threats against his life. There’s going to be so much anger here.
Other commentators have focused more on the consequences for those left behind, including the world’s property markets. Crain’s considers the possible fallout for New York here while a piece from The Guardian over the weekend looked at the possible outcomes for London’s landlords.
If WeWork were to fail, the tremors would be felt throughout the property industry, particularly in the UK. Why? Because WeWork has quietly become the largest private tenant in London, as well as extending its reach beyond the capital to Birmingham, Manchester, Edinburgh and Cambridge, with 60 offices nationwide. Only the UK government has more office space in the capital.
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In the past five years, it has signed lease agreements for 344,000 sq metres (3.7m sq ft) of office space – more than seven times the floorspace in the Gherkin tower in the City financial district.
Others have focussed on what the future holds. As this article from The Economist suggests, whatever has happened with WeWork there has been a shift in the office market to which we must all adapt. It’s a point picked up in this commentary from CBRE, who conspicuously avoid the use of the term coworking as much as they can, preferring to focus on flexible and agile space. The King is dead. Long live the King.