(Reuters Breakingviews) - WeWork is getting more complex as it readies for an in...
FILE PHOTO: The WeWork logo is displayed outside a co-working space in New York City, New York U.S., January 8, 2019. REUTERS/Brendan McDermid/File Photo
Right now WeWork is in a state of high growth, and high cash-burn. Its revenue rose 106% last year to $1.8 billion, as its net loss more than doubled to $1.9 billion. The idea is that while it’s costly to renovate space and find tenants to start with, buildings then generate substantial operating profit – with a margin of perhaps up to 30%.
There are advantages too. WeWork can buy buildings it likes rather than offering only spaces that were available for long-term leases. If its hip offices lure other tenants into the building then it can reap the benefit of higher rents paid by occupiers who aren’t direct customers. And the ability to sell a building may be useful if WeWork needs money.
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