The real estate sector bought into the WeWork dream. Now it can’t admit it might have made a terrible mistake
The property sector, so fundamentally disrupted and discombobulated by WeWork’s wild rise, is now banding together to help it survive.
Landlords and agents are wary of going on the record when mentioning WeWork — and most decline to talk about it. If they do, it’s in broadly positive terms. How has a company that was not long ago classed as an outsider and a disruptor come to hold such sway over an industry that’s famously conservative and slow to innovate — especially now?
WeWork’s UK expansion, particularly in London where it’s the biggest commercial occupier in the city, makes it a significant source of business for agents and landlords who don’t want to burn bridges piled high with money. But, as recent events have shown, that money isn’t quite what it seems. WeWork made a $1.25bn loss in the third quarter of the year, with Softbank now enacting a drastic change in strategy that focuses on income generation. In an industry that has come to depend on WeWork, there is hope — real or forced — that profitability will follow. If it manages to slim down its operations, new centres might not open as often, but WeWork could continue to be a major player – and spender – in UK property.
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