Office rental costs are basically highly correlated with the business cycle, when we're late in the business cycle there's lots of companies doing well, so they're hiring people so they're expanding so they need more office space. We can see that's true due to the low unemployment rate. This drives prices up. Because WeWork's business model is primarily to offer short-term flexible agreements their business is doing great now.

The problem is that WeWork is agreeing long-term agreements (5-10 years) with their suppliers. So when a recession happens unemployment will spike, businesses will close offices, consolidate to the low cost offices they own (which they can do really easily with their flexible agreements with WeWork) and WeWork is going to be left with lots of expensive offices that no one wants to use. That's one of the reasons their debt is so expensive.