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Not Done Yet: WeWork Raises $340M Of Fresh Equity To Continue Building Acquisition Drive

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Not Done Yet: WeWork Raises $340M Of Fresh Equity To Continue Building Acquisition Drive
Devonshire Square

WeWork has raised a fresh slug of equity for the fund it is using to make real estate acquisitions.

According to filings made with the U.S. Securities and Exchange Commission, WeWork raised $341M of fresh equity for WeWork Property Investors last week. The equity takes the total amount raised by the fund to $747M.

With the equity, WeWork has the ability to become a significant owner as well as occupier of real estate. So far its buying has been focused on New York and London.

Last month the fund completed its largest deal to date, the $850M purchase of the Lord & Taylor department store building on Fifth Avenue in New York.

That deal was completed using $600M of debt, provided by a consortium including JP Morgan and Starwood Property Trust. Another $300M of debt will go to refurbishing the building, which will become WeWork’s HQ.

In London, WeWork also brought in equity partners as well as using debt to make its equity go further. In April 2018 the company completed a deal to buy Devonshire Square, a 620K SF office complex in London, from Blackstone for £580M ($770M).

The acquisition was partly funded through a £240M loan from Bank of America Merrill Lynch, putting the total amount of equity in the deal at £340M. WeWork provided 10% of the equity, with the rest being evenly split between U.S. pension fund TIAA and Danish pension fund PFA Ejendomme, both advised by TH Real Estate.

This week CoStar reported the WeWork fund is in talks to buy another London office building, the 91K SF 99 Queen Victoria St., for around £65M, a 7% yield.

The building is owned by Oman’s sovereign wealth fund and let to Sumitomo Mitsui Banking Corp., which has a lease break in 2021.

WeWork declined to comment on the equity raising.