Mcnellis: Does Wework at All?
A very interesting article by John McNellis, Principal at McNellis Partners, and a sometimes astute contrarian, on WeWork. The shared office company leases 14 million square feet of office space, is reportedly valued at $20 billion, has 220,000 “subtenants”, and needs a 60% occupancy to break even. They lost $934 million last year, and just raised $702 million by selling 7-year bonds that pay 7.875% interest. (The Registry, May 8, 2018) I Googled “Regus bankruptcy” and came up with the following on The Guardian website, “Regus, which rents serviced office space to businesses, prospered during the boom years of the late 90s as start-ups mushroomed. But it has fallen victim to the economic downturn, with an over-supply of office space driving rental values down in some of its markets and forcing it to retrench.” Regus filed for bankruptcy in January, 2003.
