Re:WeWork Isn’t a Tech Company
by polygotdomain on Thursday August 22, 2019 @08:51AM
(#20767439)
I agree with both the other answers (reletting space and branding), but there's another one that's just as important; increasing rent.
If there's a shortage of space, having WeWork take a chunk of it off the market is only going to move rents higher. Also, whatever you sign WeWork at is going to set a significant comp in the market, which can again push rents. Businesses do like the idea of being close to a WeWork, so that's going to put more pressure on rents.
There are tenants that are great in bull markets, some that are great in bear markets, and others that are great in both. I would very much describe WeWork as a tenant that is a great bull market tenant, but that's about it.
If there's a shortage of space, having WeWork take a chunk of it off the market is only going to move rents higher. Also, whatever you sign WeWork at is going to set a significant comp in the market, which can again push rents. Businesses do like the idea of being close to a WeWork, so that's going to put more pressure on rents.
There are tenants that are great in bull markets, some that are great in bear markets, and others that are great in both. I would very much describe WeWork as a tenant that is a great bull market tenant, but that's about it.