WeWork plans to make Investments in Real Estate

WeWork plans to make Investments in Real Estate

What is WeWork, its current activities and plans for the future

Over the years, WeWork has opened 425 offices in more than 35 countries, gained the status of the largest tenant in Manhattan, and in fact revolutionized the rental of commercial real estate. In the meantime, the company plans to change its approach to real estate and make investments in it.

WeWork today

WeWork filed documents for the initial placement of shares – IPO. In 2019, this may be the second largest entry to the stock exchange – immediately after the company Uber, whose estimate was $82 billion WeWork is now estimated at $47 billion But like Uber or the same Lyft, which recently held an IPO, the company still remains unprofitable. Potential investors have already turned away from the company, stating that the business is not technological.

Due to problems with investments, the company is trying to find a solution in cooperation with banks. But they are reluctant to issue loans. WeWork is a private company, its financial information is closed and not always clear: in different countries, different legal entities, it is not always clear who, for example, took the building for a long-term lease, and who – rents in the short term. The WeWork output should change the attitude of creditors in the company: banks are more willing to provide loans to public companies with clear financial statements.

For WeWork, entering the exchange is a chance for salvation: by placing there the company hopes to get the necessary funds for existence.

According to CNN, parent company WeWork is planning large real estate investments in 2019, despite the company’s potential to lose money.

Estate investment

The beginning of this year was marked by a conflict of interest for WeWork. It was found that the head of the company A. Neiman leased WeWork property, which belonged to him. As a result, he received money through cooperation with the company. Neiman was accused by investors of a conflict of interest.

Neuman took the decision to transfer some of his assets on the balance sheet of the investment Fund ARK. The Fund plans to operate on the market as an independent business unit. At the same time, it will be monitored by WeWork.

WeWork is in danger of financial losses, but its parent company is not going to save and plans to invest in real estate. The company has created an investment Fund ARK of $ 2.9 billion, a platform for real estate transactions. ARK will be engaged in the purchase of premises.

WeWork intends to expand its activities and plans to create an investment Fund in the near future. Thus, the company wants to attract new funding, which will be spent on the purchase of premises in which it will become a new tenant.

The company We said that over a sufficiently short period look WeWork real estate has significantly transformed.

A platform for real estate operations

The platform is aimed at improving the assets and activating the activities of investors.

ARK has a powerful platform for real estate transactions This platform was created by WeWork Property Advisors, a subsidiary of We and Rhône Group.

ARK will focus on real estate operations, which will be carried out in various cities located at the intersection of global transport routes. This activity will also be carried out in developed secondary markets, for which the emergence of WeWork will only benefit. WeWork plans to apply the “space as a service” scheme to participating firms in real estate under the control and management of ARK.

ARK will be able to access actions aimed at selecting the site and technology of We, the patent-granted company, as well as its relationship with colleagues and participating firms. All this will create the potential to enjoy a huge range of real estate opportunities. The intention of ARK is the rapid stabilization of assets by implementing a prepared and proven business plan, as well as the adoption of holistic solutions of We for property owners, taking into account the current capabilities of We in the selection of suppliers, construction, filling and execution of the functions of the real estate operator.

What WeWork expects as a result of real estate investments

The wework company says that investment in real estate now will allow in the near future to make a profit as a result of the delivery of the acquired lease and premises.

Wework’s management says it will only make a profit if it slows down growth, which is direct evidence that the company is using cash wisely and in the right direction, not just burning it to survive.

This is a well-founded business plan, which contains a traditional approach in view of the fact that many firms-landlords have owned buildings, and an unconventional approach, which is possessed by the company WeWork. So we can summarize that the business based on the ownership of the real estate and renting it out is quite simple and at the same time successful. However, the opinion and assessment of investors are very important here.

Some experts believe that the launch of ARK will be a new and significant stage in the development of WeWork, which will have a positive impact on its functioning and stimulate the growth of its revenues, using the extensive experience and real estate network of the company.

What is WeWork

In eight years of operation, WeWork has opened offices in nineteenth countries around the world and reached an estimated cost of $20 billion. To date, the cost of the company has almost reached $ 50 billion, according to BBC.

WeWork is an American company that provides common workspaces for subcultural communities of technology startups and services for individuals and businesses performing various activities.

Once in the system, the recruit gets access to all the bonuses that WeWork has a whole collection of:

  • group insurance programs;
  • HR-services;
  • accounting;
  • payment services;
  • web hosting and beer (the latter — free of charge and at any time of the day).

You can become a member of the WeWork community by choosing one of three tariff plans: $45, $95 and $350 per month and paying with digital currency . If you are a cryptocurrency holder, you can pay by transferring funds from your cryptocurrency wallet.

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