- WeWork signed only four new leases for a combined 184,000 square feet of space in the last quarter of 2019, according to CBRE data.
- The troubled coworking startup added an average of 2.54 million square feet of space in the previous four quarters, signalling a 93% drop in leasing activity.
- The dramatic slowdown comes as SoftBank, which bailed out WeWork after its IPO fell through, scrambles to turn around the company.
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WeWork signed only four new leases for a combined 184,00 square feet of space in the final three months of 2019, marking a 93% drop from the average of 2.54 million square feet it added in the preceding four quarters, according to data from CBRE, a real estate firm.
The dramatic slowdown in leasing activity comes as the coworking startup hustles to reshape its business after a devastating few months. For comparison, WeWork signed 331 leases for 12.7 million square feet of new space in 2018, and added 16.3 million square feet in the 12 months to June 30 2019, according to its IPO filing.
WeWork filed for an IPO last August but shelved its plans to go public after investors recoiled from its vulnerable business model, mushrooming losses, lack of governance, and the controversial behaviour of cofounder and then-CEO Adam Neumann.
Drowning in bad press and running short of cash, Neuman stepped down and WeWork accepted a rescue deal from its biggest backer, SoftBank, which valued it at a fraction of the $US47 billion valuation it secured at the start of 2019.
Similar to how WeWork signs a lease for a space then renovates and refurbishes it to attract members, SoftBank is scrambling to revitalize WeWork by selling off peripheral businesses, laying off thousands of employees, and hitting the brakes on growth.
The abrupt drop in new leases suggests the Japanese conglomerate has largely halted expansion as it works to fix the core of the company.
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