WeWork and the new brand of office-space providers
WeWork owner The We Company published detailed financial statements for the first time on Wednesday, revealing breakneck revenue growth and soaring losses as it prepares for an initial public offering as early as next month.
WeWork has sent a shockwave through the office real estate sector globally with its model of taking on long-term leases and renting them out to corporate clients on a flexible short-term basis.
Its funky, Silicon Valley style co-working environment have proved a hit, transforming it into a major player in the space of a couple of years.
The model, however, has raised skepticism among investors, who are concerned that WeWork could be left holding substantial liabilities in a downturn as clients evaporate.
Flexible office providers have dominated leasing in major gateway cities, most notably London, New York and San Francisco, a sign of growing demand by companies and not just the start-ups and entrepreneurs that put coworking on the map.
Below is a comparison on some of the top office space providers in the market and how they compare on some key metrics:
– WeWork (as of June 30)
Total liabilities: $24.6 billion
Total square feet: Did not report square footage it manages
Footprint: 528 locations in 111 cities across 29 countries
Revenue: $1.54 billion (first half of 2019)
– Boston Properties Inc (as of June 30):
Total liabilities: $13.25 billion
Total square feet: 50.9 million
Total properties: 193
Footprint: United States
Market Cap: $19.67 billion
Revenue: $733.7 million
– British Land Company Plc (as of March 31 – for H1, 2019):
Total liabilities: 3.57 billion pounds ($4.30 billion)
Total square feet: 22 million
Total properties: 127
Footprint: United Kingdom
Market Cap: 4.41 billion pounds
Revenue: 904 million pounds
– IWG Plc (as of June 30 – for H1, 2019):
Total liabilities: 298.1 million pounds
Total square feet: 50 million
Total properties: More than 300
Revenue: 1.30 billion pounds ($1.57 billion)
Footprint: 18 countries
Market Cap: 3.72 billion pounds
Cash-in-hand: 385.1 million pounds (Cash flow before net growth capital expenditure, share repurchases & dividend)
– Mitsubishi Estate Co Ltd (as of Aug. 6)
Total liabilities: 77.26 billion yen ($730.04 million)
Total square: Not available
Total properties: Not available
Revenue: 265.88 billion yen
Cash-in-hand: 243.34 billion yen (at the end of the year)
Footprint: Japan, U.S., U.K., China, Singapore