WeWork Cos. set to rent space in Hong Kong’s bar district
said. “We were both contrarians, but he was better, brighter and more aggressive in building his own brand. I had great people around me and the wind at my back a little.”
With money from Bass, Barrack founded Colony Capital in 1991 and built a private equity giant by investing in soured loans and real estate, including celebrity-centric deals such as buying Neverland Ranch and saving photographer Annie Leibovitz from bankruptcy. The company persevered after some missteps in the mid-2000s — including backing the $8.5bn purchase of Station Casinos, which ended up going bankrupt, and getting crushed on Xanadu, the trouble-plagued $2bn retail and entertainment complex in New Jersey’s Meadowlands, during the financial crisis — and Barrack now has a personal fortune that’s estimated at $1.3bn, according to the Bloomberg Billionaires Index.
His collection of residences includes a ranch, polo facility and winery near Santa Ynez, California, and a condo in Manhattan’s Trump Parc East. In Los Angeles’s Bel Air neighbourhood, he’s developing a mansion that will be at least 4,900 sq m (53,000 sq ft) and a Colony spokesman said it is being built for a friend, whom he declined to identify.
People close to Colony say Barrack surrounds himself with a tight circle of lieutenants and values loyalty. Senior leaders, who typically number 10 to 15 at a time, stay for an average of 12 years, and many have worked with him since Colony Capital’s inception, according to the company. He sometimes hires people he knows or as a favour to others. Such employees are known as friends of Tom, or “FOTs”, by Colony workers, according to people close to the firm. Some FOTs lack the necessary business experience or acumen, and often end up having ambiguous roles, said the people, who asked not to be named discussing internal matters. Still, employees are rarely fired, they said.
Barrack took Colony Capital public in 2015, merging it into Colony Financial, a publicly traded Reit, giving the company access to $9bn in assets and making it less dependent on outside money.
“I was giving back to all the people who had been loyal to me all that time and giving them a currency, a balance sheet, a company and a future,” Barrack said. “And it’s given me space to think about other things.”
The marriage of Colony and the NorthStar companies — one of which focused on commercial property investments and debt, with the other managing the Reit’s assets — accelerated growth for Colony Capital, which had been slower to raise money from institutional investors after its financial-crisis losses. By 2010, Colony’s flagship private equity fund had lost 60pc of its value.
NorthStar had the ability to pool money from individual investors through entities like non-traded Reits, which are sold to “mom-and-pop” investors and aren’t traded on stock exchanges. Colony had already been exploring buying or building such vehicles itself.
Vocal shareholders had argued that top managers were collecting millions of dollars in compensation even as the stock was underperforming. The new company has about $56bn in assets, compared with about $25bn for Colony before the merger. Barrack personally owns or controls an almost 5pc stake, according to public filings.
Barrack has become less visible at Colony NorthStar, with Richard Saltzman its CEO now the public face of the firm, as it takes shape and finds its place among other Reits. Barrack has become more visible when it comes to defending Trump. He continues to weigh in, as a friend, but contends the president knows what he’s doing.
“I have given my thoughts on a variety of topics,” Barrack said. “And he has thanked me for my opinion and then said, ‘But if I listened to you I would never be president. I’d still be on ‘ The Apprentice.”
(Bloomberg) WEWORK Cos., the coworking space company that’s among the world’s most valuable start-ups, is in advanced talks to rent a building in Hong Kong’s popular nightlife district near the city’s business centre, according to people familiar with the matter.
The New York-based firm is seeking to rent Hotel LKF by Rhombus on Wyndham Street, said the people, who asked not to be identified because the information hasn’t been publicly disclosed. The boutique hotel, located in the Lan Kwai Fong district that’s known for its bars and nightclubs, closed down on July 1 and will be converted into an office building by the middle of next year, the owner Peterson Group said in June.
WeWork’s expansion in the world’s priciest property market comes as soaring office rents have pushed financial firms and hedge funds out of the financial district. Demand for f lexible and shared offices is surging in Asia, with the area taken up by such work spaces in Hong Kong’s central business district expected to double this year to 23,200 sq m (250,000 sq ft), according to property broker Colliers International. Flexible work spaces accounted for about 9pc of the office space in the city’s financial district as of 2016, Colliers said.
Spokeswomen at Peterson Group and WeWork declined to comment. The agreement isn’t final and negotiations may still fall through, one of the people said.
WeWork rents out f lexible office spaces to start-ups, freelancers and businesses and runs more than 20 office projects across Asia. As part of its expansion across Asia, WeWork announced a joint venture with SoftBank Group last week in Japan and plans to open its first office in Tokyo in 2018. WeWork earlier this month raised $ 760m in a funding round that values it at about $ 20bn after the investment, said a person familiar with the matter, ranking it among the world’s five most valuable start-ups.
The company last year rented more than 9,300 sq m (100,000 sq ft) in Hong Kong’s Wan Chai and Causeway Bay areas, according to data from Jones Lang LaSalle Limited. Hotel LKF, which includes 14 f loors of rooms and nine f loors of retail space, is housed above Gordon Ramsay’s Bread Street Kitchen & Bar restaurant, which is expected to stay.
The average annual prime office rent in Hong Kong is $112 per sq ft, higher than the $ 86 per sq ft in London’s city centre and $ 82 per sq ft in midtown New York, according to Colliers. Coworking spaces let people stay in traditional office areas while reducing rental costs.
Tom Barrack is a close friend and an informal advisor to Donald Trump
High office rents have made flexible work spaces more popular