The work place is changing; there is no denying that. What do the changes look like and how do they affect the real estate market? I was in Dallas visiting my granddaughter (and her parents, my son and daughter-in-law). It was a Friday, so both my son (he is a consultant) and I had work to do. Instead of going to the coffee shop he took me to a place called WeWork. I was amazed at this co-workspace business model, BRILLIANT. WeWork is developed on the concept of sub-leasing office space to small companies and individuals. Simple, right???
WeWork’s Mission Statement is “To create a world where people work to make a life, not just a living.” Their values are also very representative of where the millennial business mindset is:
We do what we love and are connected to something greater than ourselves.
We are creators, leaders, and self-starters. We try new things, we challenge convention, and we’re not afraid to fail.
We are genuine to our brand, mission, and values. We’re not perfect, and we don’t pretend to be. We are always honest and as transparent as we can be.
We never settle. We get “s**t” done and we get it done well. Be persistent and knock down walls–literally if you have to. You have our permission.
We are grateful for each other, our members, and to be part of this movement. We don’t take success for granted. We’re happy to be alive.
We are in this together. This is a team effort. We always look out for one another. We have empathy, we know we’re all human, and know we can’t do any of this alone.
Adam Neumann is WeWorks CEO and co-founder. He and Co-founder Miguel McKelvey saw an opportunity when they were working in the same building in Dumbo, Brooklyn. Half the building was vacant, and they got the idea to create a “co-working space” for entrepreneurs like themselves.
The first iteration was called Green Desk. The concept took off, and at its core was community. When they started they would lease property and then sublease it to the tenants as individual work spaces.
I’m sure you’re asking yourself, “WeWork sounds interesting but how does this relate to Real Estate Investing?” Well, the founders started to move in a different direction in 2016, and that is where the investing comes in.
According to an article in Bisnow the “big strategic shift …would place it in direct competition with the landlords it partners with all over the world. WeWork vice chair Michael Gross made the announcement during the Cornell Real Estate Conference … Michael says the company is looking at sale-leaseback transactions to purchase both WeWork and WeLive buildings. The company would raise funds through outside investors for its investment vehicle, similar to Blackstone Group and Starwood, instead of using its own money. This news surfaced after WeWork raised $260M in its latest round of funding, pushing its valuation to $16.9 billion.”
I love the entrepreneurial spirit that WeWork inspires; however, it is also an opportunity for me to make a point. If you own real estate as part of your business model, your business is better positioned to succeed. Just ask McDonald’s or Sam Walton.
Diana D. Hill – Diana@OTARealEstate.com