I've used lots of the London WeWork sites since 2015, and carried on all through the depths of the pandemic and since.
For the last few years, I've been scratching my head how they are even staying open. Almost all of the centrally located ones around the City have been like ghost towns. Sometimes it seems there are only 2-3 people in the whole building, especially Monday and Friday.
In the last 3-4 months they are finally getting back to how they were. Struggling to get rooms, phone booths, hot desks etc and a bit of buzz is returning. I really think return to office is finally a thing after the summer.
My experience with their sales teams has been abysmal. I must have contacted them 5 times asking about upgrades, and I've never once had anybody follow up properly - e.g. email trails go dead, no availability for viewings etc.
I know of a few companies in London who’ve rented large private spaces in WeWork’s after closing private offices during the pandemic. The WeWork’s were barely used so they’ve forced people back over the last few months. Noise and lack of meeting rooms are big issues. As is sound proofing of meeting rooms, WiFi speed, and general office etiquette (not WeWork’s fault). At times the person in the next room drowns out the person you’re actually video conferencing with. After working in a wide variety of coworking spaces in London over the years I avoid them like the plague. A private office, even if it’s open plan, is 100x better.
One thing I always wondered, speaking of etiquette was how security was handled. You get up to go bathroom, get coffee, even leave for lunch. Do you have to secure valuables? Do each desk have a locker?
If I remember correctly we had monitors secured to our desks (we had permanent desks in the open space). Laptops we took home. During lunch etc. they were left on the desk. Generally there are lots of people around you who see you everyday and would recognise someone they haven't seen approaching your space. I believe there are lockers available too but I've never used those.
I have worked in their offices all over the world for years. I generally leave my laptop and bag through the day and when I go for lunch. I've never had an issue or even heard of any criminal incidents in a WeWork. They have reasonable security, everyone should be a known member, and there are lots of cameras everywhere.
Many people who work there will also have their own lockable offices.
WeWork was executing a strange vision of how "creative" work should be done while ignoring the ordinary needs of office workers. Open-plan couches instead of soundproofed phone booths.
> In the last 3-4 months they are finally getting back to how they were. Struggling to get rooms, phone booths, hot desks etc and a bit of buzz is returning. I really think return to office is finally a thing after the summer.
For a lot of buildings they cut the monthly membership price in half about 6 months ago. It’s led to the WeWork I go to being absolutely PACKED most days now.
I am in London as well; I think it depends on where you are going. Also they are being clever with closing meeting rooms, so that people are incentivized to make bookings (use & buy credits) instead of walking into one of the many unlocked meeting rooms.
> Almost all of the centrally located ones around the City have been like ghost towns. Sometimes it seems there are only 2-3 people in the whole building, especially Monday and Friday.
Awesome. They just gained a customer. It's probably the best time to work there.
This is has been me exact experience with WeWork in London, honestly its the only thing that kept me sane during the lockdowns.
Me and like 2 other people would have an entire floor to us. Then some time around early last year it went from empty to nearly impossible to find a free spot.
My go to place was Merchant Square, Paddington. I had to stop going there because I couldn't find a single spot (not hyperbole). Then Hammersmith, which got filled up too and the last one was Holborn, which was relatively free until I left London.
My colleague told me their CEO was very frank about their frogboiling strategy - they will not do it abruptly (otherwise many people would quit) so they will gradually increase the number of days required in the office. A difference of one day doesn't seem a big deal and it's easier to innerly convince the ones hesitating that it's not worth the effort of looking for another job, the stress of job interviews etc.
I'm happy I'm permanently WFH and don't have to deal with all this crap.
Are you sure? They’ve always been 24 hours 365 days a year for building members, and typical office hours for day pass visitors (9-6 Monday to Friday) — that hasn’t changed (here in London at least).
our wework in waterloo is quite full, especially on tuesday/thursday. Astonishingly, there are still two baristas serving coffees from state of the art La Marzocco coffee machines. All this while the share price collapsed and the market cap is $150M.
All access was never 24/7 access to all buildings as far as I’m aware specifically because the building membership benefit is 24/7 access to your primary building. Which buildings were you able to access 24/7? Just one or many?
I am reminded of this quote:
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem." -J. Paul Getty
WeWork's business model - arbitrage between long term liabilities (lease a lot of space from a building) and short term assets (sub lease portions of that space with short terms).
That model works poorly in good times, and never works in bad times.
Can someone explain why any one given lender wouldn't just say "fuck you, pay me"?
In the broad sense I understand - if paying would cause a going concern for the lendee, the le der would rather get something tether than nothing.
But in this case, the article even said the wework has cash on hand and a credit line. Why wouldn't any one given lender try to cash out in full and run for the doors, and leave all the other lenders who renegotiated holding the bag? Simply get a legal order forcing wework to pay in full while they still have the ability to (even if it meant paying YOU in full would make it so they wouldn't be able to pay OTHERS later).
Where does the lender get this magic “get paid in full” option? Obviously if the lender has that option, they would take it. But they don’t. Even if they got a court order demanding wework pay out, that claim would get lumped in with all the other claims. You can’t just magically skip the line.
Only if they file for bankruptcy. I'm saying get paid in full via court order before they file for larger bankruptcy.
If wework owes you $100M that you demand repayment on, and they owe $1B in total, they may not want to declare full bankruptcy just for your 10% of the total debt. In which case you can get a court order to be paid in full, since they was the terms of the original debt contract.
If the debt is structured in such a way that the lender can demand payment in full at any time, then sure, that might work. But the vast majority of debt is not structured like that.
I meant more so get paid in full whatever you're owed at that point in time. But you're right, sure you may get full payment on the 1/20th of a debt you're owed today, but if that puts the rest of the repayments at risk I can see why you'd want to negotiate.
I've never seen loans of that size, but in my understanding a lot of debt is structured so that if a payment is missed the lender can call the entire amount.
You can’t just get a legal order forcing a borrower to pay. A lender is at the mercy of a borrower’s willingness to repay unless the lender is willing to accept pennies on the dollar by forcing the borrower into bankruptcy.
I dislike this "negotiate by brinkmanship" approach intensely. Musk did it to landlords, suppliers of goods and service, lawyers.
It's not valid business practice. Wework should be put in the hands of an official receiver.
The whole "stick it to the man" vibe of one class of capitalist being a parasite on another kind of capitalist, and in the end it's shareholders and tax payers who suffer.
Par for the course with NYC headquartered companies.
I have encountered them not paying office rent or contractors if they think they can get away with it. The scary thing is they do get away with it. Everything is a negotiation, all the time. It is very tedious.
This is not the same. ggm is referring to a buyer and seller agreeing to a trade, the seller providing the product or service, and then the buyer reneging on the payment in order to extract concessions because the legal and headache costs of pursuing full payment via courts would presumably not be worth it for the seller.
This is trying to arbitrage the inefficiency of courts. Technically, everyone in society can do this, but it raises the costs of transacting considerably and reduces societal trust.
A high trust society where you do not have to worry about dragging everyone to court or having to fund courts for many more cases will waste less resources on dispute resolution.
In TV, the buyer (cable or satellite TV business) and the seller (content owner) never had an agreement after a certain date, so the channels disappearing is not a similar situation.
On the one hand, it's still playing within the legal rules of the business system. And one might expect sophisticated lenders to account for this possibility in their contracts and financial terms. I.e., to price in this risk.
On the other hand, it's at odds with my intuitive notion of honorable conduct. On a personal level, I see obligations to others as carrying moral weight.
Imagine everyone doing this, all the time. That is what it is like living in a low trust society, such as many developing countries.
Simple transactions cost far more, take way more time. Lots of resources wasted in vetting, and lots of price premiums to account for inevitable losses due to corruption.
And it's easy to do... "If you are late paying the due amount, even by one day, then the amount payable increases by 25% immediately, followed by 5% more each day until paid".
That way if anyone plays chicken with anyone else by paying late, at least when bankruptcy proceedings are begun the payable total will be far larger, and so a bigger piece of the pie will be theirs.
You are unable to force them to pay $100 million but have cleverly written contract clauses that cause them to owe you $125 million now. Which they're also not paying.
the founder of WeWork took bajillions of dollars from investors and did all sorts of related party shennanigans to take more, then took half a billion dollar payout just so he'd fuck off finally.
The risk of their default is supposed to be built into the price. On the other hand they suffer short term reputational damage which could prevent them from getting future loans, but they are in survival mode so that doesn't really matter right now.
I guess it is unpopular to say but I like WeWork and I'm rooting for them. We were very very early users before even their NYC Flagship at 175 Varick. Those early days were really memorable. They provided something no one else did. I think the model makes sense over the long term with some austerity, so I'm rooting for them.
Is that true? Perhaps Wework did / does some unique things I'm unaware of.
As per [0] - co-working spaces started ~25 years ago, and by the time WeWork was founded (2010) there were at least 300 co-working spaces operating in the USA.
I've never been to a WeWork but traditional co-working spaces were kinda grim.
They'd often provide pretty bare-bones service - no fancy coffee, just a fridge where everyone had to label their own milk.
They'd have mostly small/single-person offices which people worked in alone with the door closed. I've heard some people find a 'community' at wework offices, a bunch of closed doors of course provides no such thing.
And they mostly rented space to permanently small businesses, like one-person accountancy companies. Which is a fine way to make a living! But co-working spaces weren't a place you'd expect to network with people whose businesses were going to the moon.
I actually preferred all the independent co-working spaces before wework. They had their own unique character while wework was always a filing cabinet for office workers with no special character to them.
Yes, they provided more office space for you on Softbank's dime. Funnily enough, this isn't sustainable.
Of course the model, broadly speaking, makes sense. There are loads of boring, CRE rental providers. e.g. Regus. Which never had valuations in the billions, nor billions of VC inflow to subsidise the offering. WeWork is piss poor execution on a thin margin business.
I like WeWork but I’m not sure I’m rooting for them. They pioneered the model, they got in over their skis and expanded too fast and took their eye of the ball with a million distractions.
They deserve failure. I believe the model does work and that some other company content to work on a smaller scale will find plenty of success with it. Here in NYC there are already a number of them.
They had zero moat. I’ve also been to a few spaces that were basically wework clones on the amenities and location but slightly better price and probably less overhead so maybe it’s sustainable
WeWork did have a small moat, namely the worldwide membership plan ("WeWork All Access") to 500+ locations incl. conference room. Even given they massively overextended on real-estate (by paying insane commissions up to 50%) and are about to go boom, it (is/)was still good value in the short term, if you change(d) location often.
(Regus similarly has access to lounge, coworking and office memberships worldwide 4000 locations).
Everything in business is a negotiation: these loans will have been established with the same leverage-everything negotiation style. WeWork are announcing it because their position would be weakened if it was leaked by their lenders but this sort of behaviour happens every day in business — it’s just rarely announced. The lenders would engage in exactly the same behaviour it benefited their financial position, it’s a parasite eat parasite world.
I certainly agree that not paying suppliers etc. is problematic behaviour but this isn’t an example of that.
This is business at truest and most raw form. Its easily one of my favourite parts of capitalism where you get as close to nature as you can in a civilised world.
WeWork is walking an extremely tight rope with a very narrow window of time and not a lot of options.
Things could go in many directions (merger, acquisition, bankruptcy, extension) and this is the last time the current management/shareholders will have any kind of say/leverage in what happens.
Do you just expect them to do nothing and wait for inevitable implosion and the subsequent wipe out of shareholders, mass layoffs and probably either the end of the brand or a restructured version that will be a shell of its former self.
Btw speaking of Elon, he was in a very similar spot this time last year. Mass exodus advertisers dropping already bad financials of a cliff with looming interest payments.
> and in the end it's shareholders and tax payers who suffer
This makes it look like a good vs bad situation when in reality its an already bad situation where you multiple stakeholders fighting for who loses the least.
I was in the "close to nature is good" camp but then the other day I watched a video of a bear infested with intestinal nematodes (don't google it) and then I realized that perhaps staying somewhat away from nature might not be so bad.
I tend to agree with you, nature can be brutal but there are also fatal second and third order consequences for a society with no sharp/rough edges.
In other words, a society without consequences leads to "too big to fail" banks and other systemic distortions.
Those who invested billions into WeWork need to suffer the consequences and equally those who gave out leases to such institutions needs take their medicine too.
>This is business at truest and most raw form. Its easily one of my favourite parts of capitalism where you get as close to nature as you can in a civilised world.
Considering it has a lot to do with how much money you have to throw at lawyers, and arbitrary things like how well staffed the courts are with judges, my characterization would be anything but “close to nature”.
Bigger, faster heavier animals with sharper teeth and better night vision eat you and you can't do much about it except hope that after you personally are gone that they predate the rest of your group so hard they go extinct before the rest of your group do. Sounds about right.
For the last few years, I've been scratching my head how they are even staying open. Almost all of the centrally located ones around the City have been like ghost towns. Sometimes it seems there are only 2-3 people in the whole building, especially Monday and Friday.
In the last 3-4 months they are finally getting back to how they were. Struggling to get rooms, phone booths, hot desks etc and a bit of buzz is returning. I really think return to office is finally a thing after the summer.
My experience with their sales teams has been abysmal. I must have contacted them 5 times asking about upgrades, and I've never once had anybody follow up properly - e.g. email trails go dead, no availability for viewings etc.