Uber and WeWork are 'middle of the road' companies, real-estate executive says

Jackal Pan / Getty ImagesWeWork cofounder and former CEO Adam Neumann

  • Uber and WeWork are “innovators” but they might not dominate the industries they have transformed, says an executive at one of the West Coast’s biggest real-estate firms.
  • “Every company in the world is not just going to knock it out of the park, right?” A. Robert Paratte said at Kilroy Realty Corporation’s investor day this week. “Some are going to be middle of the road. And I think that’s what you’re seeing in the case of these two.”
  • Uber’s stock has dropped 40% since its May listing, while WeWork’s valuation plunged from $US47 billion in January to below $US5 billion at the end of September.
  • Read more of Business Insider’s WeWork coverage here.

Uber and WeWork are “innovators” but they might not dominate the industries they have transformed, says an executive at one of the West Coast’s biggest real-estate firms.

“Every company in the world is not just going to knock it out of the park, right?” A. Robert Paratte, head of leasing and business development at Kilroy Realty Corporation, said at the group’s investor day this week. “Some are going to be middle of the road. And I think that’s what you’re seeing in the case of these two.”

However, Paratte credited both businesses with revolutionising their sectors.

“You’re not going to be getting away from ridesharing until there are autonomous vehicles,” he said. “You’re not going to see coworking go away because WeWork is reconstructing itself. So they, in fact, were innovators.”

Paratte reserved special praise for WeWork’s model of breaking up and renovating office space then leasing it on a short-term, flexible basis.

“The way I look at WeWork especially is that space that they have built is really fundamentally a great space,” he added. “If they’re not using it, tech companies will use it.”

To say Uber and WeWork have fallen out of favour this year may be an understatement.

Uber listed its shares at $US45 each in May, valuing the ride-hailing group at $US82 billion. However, mounting competition and regulatory pressures have slashed its stock price to about $US27, cutting its valuation to about $US46 billion.

WeWork has suffered an even sharper drop in value, from $US47 billion in January to below $US5 billion at the end of September. The coworking group scrapped its IPO after investors railed against its questionable business model, mushrooming losses, limited governance, and the controversial behaviour of cofounder and CEO Adam Neumann.

Running short of cash, it accepted a $US9.5 billion rescue deal from SoftBank last month, giving the Japanese conglomerate ownership of the business.

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