WeWork’s Back Is Against a Wall

Re:WeWork’s Back Is Against a Wall by gruez on Tuesday September 17, 2019 @02:21PM (#20998448)

Re: "special-purpose entities":

Why would landlords agree to this? "Hey guys, we'll sign a 25 year lease with you but only through a special purpose entity, so we back out at anytime and you can't do anything!". Given how choosy and patient commercial landlords are (eg. letting properties stay vacant for years to find the right tenant), why did they make an exception for wework?

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Re:WeWork’s Back Is Against a Wall by gamblor956 on Tuesday September 17, 2019 @03:06PM (#20998934)

They probably signed triple-net leases with WeWork, meaning that WeWork pays rent, property taxes, utilities, and upgrades/maintenance.

If WeWork walks away, they leave behind nice offices that the landlord can rent out to another tenant with minimal investment beyond a few months lost rent (that could theoretically be recouped from WeWork).

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Re:WeWork’s Back Is Against a Wall by kjs3 on Tuesday September 17, 2019 @04:38PM (#20999821)

Yup. My wife worked in commercial real estate (contracts and billing, before the crash in that biz) and she surmised exactly the same thing.

I think most real estate folks learned their lessons in the dot-com bust. Lot's of folks were making stupid office space deals with tech companies in return for warrants, etc., which ended up being worth less than nothing.

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