The truth about WeWork — has the coworking giant bounced back?

Just over a year ago, it was announced that global coworking space provider WeWork — once valued at $47 billion — had filed for bankruptcy, after its share prices fell by 98% over the course of 2023. Following a period of restructuring and the appointment of a new CEO — the company’s fifth since the stepping down of co-founder Adam Neumann in 2019 — WeWork seems to be out of the woods. Still, the question remains: has WeWork recovered? More importantly, can tenants put their trust in WeWork again?

A brief history of WeWork

Former CEO Neumann launched the company in 2010, a joint venture with businessman Miguel McKelvey. Rock-bottom interest rates and masses of newly-empty office space in the wake of the 2008 financial crash paved the way for WeWork’s explosive growth, and by early 2014, the company’s valuation had surpassed $1 billion.

In October of that year, WeWork set up shop overseas, and the company’s London South Bank location (now WeWork 10 York Road) became its first coworking space outside the US. It wasn’t long before WeWork had over 500 locations across more than 70 cities worldwide.

When the pandemic hit, demand for coworking spaces plummeted, but this wasn’t the first sign of trouble for WeWork. In 2018, the business made a loss of $1.82 billion, and the following year, it was announced that over 2,000 WeWork employees would lose their jobs — despite the company’s lofty $47 billion valuation at the time. WeWork’s problems were exacerbated by its risky business model, which led to Neumann’s resignation in 2019 after plans for an IPO fell through.

So what’s happened since then?

WeWork went public in 2021. Two years later, the business admitted ‘substantial doubt’ about its future, and in 2023, WeWork declared bankruptcy in the US. A year on, and with a new CEO in charge — a man with over 15 years’ real estate experience under his belt — can tenants put their trust in WeWork again?

In a press release, CEO John Santora shared his thoughts on what lies ahead for WeWork:

‘I firmly believe that flexible work is no longer just an option, but rather a strategic imperative for companies wanting to maximize the efficiency of their real estate footprint, as well as their dynamic workforce. While there is much work to do, with these supportive, structural trends, and a restructured organization in place, I could not be more confident in our future and I am energized and excited by the challenge that lies ahead.’

Why should I choose WeWork?

After a period of renegotiation and restructuring, the company seems to be back on its feet. But with so many providers with coworking facilities and office spaces on the market, why should tenants choose WeWork?

Flexibility: Despite challenges, WeWork’s business model continues to allow for  unmatched flexibility in terms of lease length — users can rent a desk for as little as a day, with meeting rooms bookable by the hour. For tenants seeking a more permanent setup, long-term office leases are also available. We’ve helped two clients negotiate their lease renewal with WeWork this year.

Amenities: WeWork offers its users much more than just a desk and an office chair. In fact, WeWork’s facilities go above and beyond those of many of its competitors. A number of the company’s locations feature wellness studios — complete with meditation rooms, prayer spaces, lockers, and showers — soundproof phone booths, pool tables, bike storage, printers, and large kitchen areas (tea, coffee, and snacks are complimentary).

Design: WeWork’s coworking spaces are designed to inspire. Featuring spacious, open layouts with plenty of natural light, stylish furniture, and vibrant artwork, each location is carefully curated to foster productivity and creativity. Thoughtfully designed communal areas, ergonomic workstations, and modern meeting rooms ensure a balance between collaboration and focus. Many locations also include unique design elements, such as greenery-filled lounges, custom murals, and flexible layouts that adapt to the needs of individuals and teams alike.

What’s the current WeWork tenant experience like?

Recent reports from tenants suggest that the WeWork experience is shifting in some locations. While many still enjoy premium amenities and vibrant spaces, others have noticed changes:

• Scaling back on perks: Some WeWork locations are reducing extras like beer on tap or staffed cafés. While these cuts don’t impact core functionality, they do affect the overall working experience.
• Increased rent costs: Many tenants have seen their rents rise, making it critical to evaluate whether the value offered still aligns with the price you’re paying. We’ve helped numerous clients renogiate lease terms in these situations.
• Forced relocations: In buildings facing closure, tenants have been asked to move to nearby WeWork locations. While WeWork often facilitates these transitions, the disruption can still be significant for companies relying on consistency.

Currently at a WeWork?

If you’re a current WeWork tenant, you’re likely to be wondering how the company’s recent challenges impact you. Let’s break it down:

How safe is my deposit?

Your WeWork deposit’s safety depends on the status of your building. Here are the three main scenarios:

Successful WeWork buildings: If your WeWork location is thriving, your deposit is generally secure; these buildings tend to have strong occupancy and stable operations, minimising risk for tenants.

Financially unviable buildings: If your location isn’t performing well, it might face closure. In these cases, tenants are typically given notice and time to relocate. This can be stressful, but it’s also an opportunity to explore alternative spaces. (This is where tenant representation services like ours come in handy—we’ll help you find the right space, quickly and efficiently.)

Building sales: If your building is sold, your lease terms generally remain intact until expiration. However, there’s a chance that amenities could change as new management takes over. This could affect things like community events and the availability of perks like meeting room credits and free tea and coffee.

Not convinced?
It’s natural to have reservations about committing to a long-term lease with WeWork, but the company’s newfound stability, coupled with increasingly positive reviews from London-based WeWork users in recent months, suggest the company is on more solid ground.

If you’re still on the fence about WeWork, or keen to learn more about coworking space available in London (or the UK), give us a call on 020 8588 9876.