WeWork’s Lease Volume Dries Up After Botched IPO

Shared workspace and real estate company WeWork only signed four new leases in Q4, a drop of 93 percent in leasing activity, after its failed IPO attempt, according to a report by CNBC.

The news comes as WeWork tries to tamp down expenses after an emergency injection of $5 billion from SoftBank, which ceded 80 percent of control of the company to the investment giant.

The new leases total 184,022 square feet, which is down from an average of 2.54 million square feet in the previous four quarters.

The top company in the flexible office space market is now Spaces, owned by IWG. Spaces raised its leasing footprint by 11 percent to 284,916 square feet.

WeWork has cut about 19 percent of its workers, or 2,400 jobs, to “create a more efficient organization.”

The company also closed its WeGrow private school, and said it will focus on large businesses instead of small and mid-size firms.

New space in the market went down 75 percent in Q4, and WeWork’s share went down to 18 percent from 69 percent.

“We had seen this coming right after the IPO news,” said Julie Whelan, senior director of research at CBRE.

Whelan added that companies’ demand for workspace remains high; firms tend to prefer the flex model because it gives them more options in the face of potential market fluctuations.

WeWork takes control of large buildings and rents them out top to bottom, from individual desks to working spaces for thousands of employees.

“It took these flexible office operators for landlords to wake up and realize that flexibility is a big part of their portfolio and something occupants are demanding,” Whelan said. “The ways landlords will be delivering flexibility to the market is shifting.”