WeWork CEO makes millions leasing buildings to WeWork

This whole renting out office space is hot hot hot hot now but first signs of an economic slowdown and a full blown recession and this niche market will slow down substantially!
 
I had a meeting at a WeWork the other day. Not my cup of tea being pitched in a glass room with unrelated people, potential competitors and competing investors walking past (odd since I had to sign an NDA) but kudos to the all the young guns in the ripped jeans and t-shirts working throughout the office. The meeting finished and the guy making the pitch shook our hands and walked over to the beer tap to finish off his day. At least he didn't drink during the meeting.

Place was packed, people all over the place and to be fair if I was working for a startup, why not - you get the vibrancy of working in a larger office and perhaps recruiting or being recruited by your millennial "friends". I'd argue if we get a downturn, they may have more interest as you can consolidate into hot desks and smaller space.
 
Youngins look at space and privacy different then I or my generation. Look at FB, insta they share everything. So office space is no different and welcomed.
 
Specterx said:
https://www.wsj.com/articles/weworks-ceo-makes-millions-as-landlord-to-wework-11547640000

Maybe he sees something his VC investors don't? Namely that leasing an office building for 10 years to rent it out month-to-month, desk-by-desk, has some major flaws as a business model.

On the other hand, buying a building and negotiating with yourself over lease terms to be paid with VC cash sounds like a great business model.
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Some landlords are doing the same concept for homes near university campuses. They rent a room to the kid and the parents are only on the hook for that room/rent. If 4 rooms but only 3 kids then 3 payments on the hook. The landlord to compensate charges a per room fee that would equal to way more than he would get by renting the whole house. Let’s say house can fetch $1000 rent , well he charges $350-400 per room.
 
Yea but those landlords didn't lose 1.2 Billion last year... This company is gonna get Enron'd like no other, read the income statements, it's a joke literally

You would swear Steven Spielberg is there head accountant, it's straight lunacy... Hopefully they become Public, and they say there aren't no such thing as a free lunch!
 
ElCubano said:
Some landlords are doing the same concept for homes near university campuses. They rent a room to the kid and the parents are only on the hook for that room/rent. If 4 rooms but only 3 kids then 3 payments on the hook. The landlord to compensate charges a per room fee that would equal to way more than he would get by renting the whole house. Let’s say house can fetch $1000 rent , well he charges $350-400 per room.
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The question is whether it's a sensible business model for you to rent the house for $1000 (which presumably represents a market rate, and mid-single-digit return to the landlord on his capital) with the plan of furnishing the rooms, renting them out on separate short-term subleases (as well as managing the leases in all other respects), and pocketing the difference.

Now assume that you're funded by VCs who at some point expect startup-like returns on equity, plus the landlords in question are pro commercial property investment companies rather than old geezers willing to leave some money on the table in exchange for a steady check and lower hassle, plus you've made the decision to fund yourself partly with debt at 8%. That's WeWork for you.
 
ElCubano said:
Some landlords are doing the same concept for homes near university campuses. They rent a room to the kid and the parents are only on the hook for that room/rent. If 4 rooms but only 3 kids then 3 payments on the hook. The landlord to compensate charges a per room fee that would equal to way more than he would get by renting the whole house. Let’s say house can fetch $1000 rent , well he charges $350-400 per room.
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My plan is to purchase a home near my kids' universities and have them rent it out to their buddies. They can keep whatever is made on top of mortgage + expenses.
 
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