WeWork opens new sites at break­neck speed

The Korea Times - - WORLD BUSINESS -

NEW YORK (Reuters) — WeWork has opened al­most as many new lo­ca­tions in the last 3-1/2 months as it did in the whole first half of this year, likely ac­cel­er­at­ing the speed with which the of­fice-shar­ing com­pany is burn­ing through cash as in­creas­ingly hard-nosed in­vestors scru­ti­nize its prospects for go­ing pub­lic.

Ac­cord­ing to a Reuters anal­y­sis of in­for­ma­tion on the com­pany’s web­site, WeWork had 622 sites open in 123 cities on Oct. 10. That com­pares with its foot­print of 528 lo­ca­tions in 111 cities on June 30 that was out­lined in the prospec­tus for its aban­doned IPO.

The web­site also iden­ti­fies 89 sites as “com­ing soon” and 117 sites as “just an­nounced” — all new lo­ca­tions that are yet to open.

Al­to­gether, WeWork says on the web­site that it will soon have 845 lo­ca­tions in 125 cities, but it is un­clear whether all those will still open. A WeWork spokesman de­clined to com­ment on its plans.

The quick­en­ing pace of new of­fice open­ings adds to the risks for WeWork, a com­pany that has cre­ated a global brand for its shared workspace con­cept but was forced to halt plans to go pub­lic on Sept. 30 be­cause of in­vestor con­cerns about how it was val­ued and whether its busi­ness model is sus­tain­able.

The com­pany is now cut­ting back, in­clud­ing lay­ing off some em­ploy­ees and clos­ing or sell­ing en­ti­ties that are not es­sen­tial to its core op­er­a­tions as it seeks to avoid run­ning out of cash. On Fri­day, WeWork said it will shut down its WeGrow pri­vate school in New York City as it pares pe­riph­eral op­er­a­tions.

The 97 new lo­ca­tions WeWork added in the first half of this year on av­er­age cost $2.63 mil­lion each in de­sign and con­struc­tion costs, up 38 per­cent from the $1.91 mil­lion that 82 open­ings each cost in the first half of 2018, ac­cord­ing to the IPO doc­u­ment. It added 94 new lo­ca­tions be­tween the start of July and Oct. 10, ac­cord­ing to its web­site.

Reuters-Yonhap

A WeWork logo is seen in New York in this 8 file photo. Jan.

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