WeWork Builds an Empire, Chases the American Dream

by | 30 March 2018

When I first wrote about Amazon’s stealth takeover of the retail world, I didn’t realize that global domination would be a recurring theme for 2018.

WeWork is the latest player to expand their portfolio above and beyond their business of record. The innovator in the co-working space forecasts a revenue run rate of $2.3 billion in 2018 and has aggressive growth plans for the new year. The 8-year-old company plans to open 200 additional office spaces domestically and scale its global footprint with 400 buildings across 83 cities and 27 countries.

Global expansion is only one of many developments contributing to the WeWork empire. If you recall, late last year, WeWork announced the acquisition of Lord & Taylor’s New York City flagship headquarters on 5th Avenue. The company plans to use the structure’s upper floors for its corporate headquarters, but also intends to lease out a portion of the building to co-working tenants as well as create a sustainable leasing partnership with Lord & Taylor to continue as its retail anchor.

What you may not have realized, or perhaps noticed is a better word, is WeWork’s seemingly discreet foray to create environments where work and home lives blend seamlessly and continuously. Through a series of acquisitions and partnerships, WeWork is bringing common amenities and activities one might find in his or her neighborhood into the co-working space. While office tenants chase the American dream, WeWork has been steadily building an empire to minimize time outside the office.

A round-up of WeWork’s current activity is below:

  • Work/Life Balance: Started in 2016 as an “all-inclusive intentional community” in New York City, WeLive provides rental units with planned events, exclusive access to restaurants and a private lounge all within the WeLive blueprint. Now a bustling urban center, WeLive houses the next generation concept in communal co-living just next door to its signature co-working spaces. Note: residents can also access everything else New York has to offer just by stepping outside.
  • Let’s Talk About Community: The acquisition of event-organizing service MeetUp adds another piece to the WeWork puzzle; one that provides WeWork’s tenants and MeetUp’s 35 million members with an intentional space to congregate. It’s no surprise WeWork continues to smudge the lines between work, home and play.
  • Employment Opportunity: WeWork is also entertaining the addition of company-managed retail spaces that provide an assortment of amenities for its office tenants. WeWork has begun recruitment efforts to build an internal merchandising operations team to develop this arm of the business.
  • Boutique Retail: With Wall Street’s speculation of a WeWork public offering, the company ended 2017 with short-term leases targeted at retailers. The concept adds a new varietal to the pop-up kiosk craze.
  • Education: Q4 2017 also saw the pilot of WeGrow, a private elementary school with a “conscious entrepreneurship” curriculum aimed at grooming the startup founders of tomorrow.
  • Health & Wellness: WeWork opened its first gym and spa in New York City’s Financial District last fall. Coined as the newest addition to join the urban wellness bandwagon, RisebyWe’s clubhouse promotes the use of social fitness to elevate the mind, body and spirit.

How Will This Affect Life as We Know It?

WeWork’s drive to capitalize on the surplus of office space in large retail buildings is disrupting the traditional leasing model worldwide, and folks in the commercial real estate industry are paying attention to the company and the CEO at its helm.

The Real Deal recently reported a revision to WeWork’s incentive plan that encourages brokers to prospect potential leases by doubling commission rates on one-year contracts and increasing the commission percentage for expansions and renewals.

Landlords who have been hesitant to offer shorter-term, more flexible leases should pay attention, too. The commercial real estate industry is witnessing yet another paradigm shift, brought on by technology, the sharing economy, surplus real estate and the demands of today’s younger, more connected workforce. As with any industry disruption, those who don’t keep up are at risk of getting left behind.

Anjee continues to be an insatiable collector of all things retail. She’s a student of culture living next door to future shoppers, whose fleeting trends constantly change the retail landscape … driving retailers, landlords and developers crazy!

Read more in: