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WeWork, the company you probably hadn't hear of before this year and is now rather famous for its massive failure of an IPO, is actually doing well when it comes to its core business according to a recent market study published by CBRE.
WeWork now captures 69% of flex leasing in the United States
We've chronicled WeWork's drama over the last few months and the story has seem to get worse at every turn. SoftBank certainly isn't happy as it posted its first loss in years last quarter - a massive $8.9 billion write down thanks in large part to WeWork and Uber.
All the noise, including its CEO and founder getting forced out and even layoffs, the company seems to be executing on revenue growth quite well. WeWork posted a nearly 15% increase in leased square footage compared to the previous quarter and now, according to CBRE, is the leasor of 69% of the total of ~4 million sq. ft. leased in the U.S. WeWork conrolls two-thirds of the market.
In terms of its strongest regional markets; Manhattan, Los Angeles, and Dallas/Ft. Worth were the company's three best and combined were good for 38% of activity. On the other end of the spectrum; WeWork had some solid rising stars in Detroit, Miami, and Salt Lake City which all skyrocketed from nearly nothing to fairly busy, each posted a 700% increase in activity year over year.
So all may not be lost for the company which was once valued as high as $47 billion and now may be worth less than $5b.
We can take the news as both bad and good. WeWork is dominating the market and its first-mover advantage is clear. It has nearly 70 percent of the domestic American market.
The flip side is that the entire market itself may not be large enough to support the company's ambitions as it can only grow as large as the market it is competing in. Flexible office leasing seems to be gaining some traction however, as total square footage available for rent increased 9.4% from Q2 to Q3.