WeWork Has Officially Pulled The Plug On WeLive
WeWork handed over management of the two WeLive locations, in Northern Virginia's Crystal City neighborhood and on Wall Street in Manhattan, to the owners of the buildings, JBG Smith and Rudin Management, a WeWork spokesperson confirmed to Bisnow Wednesday.
"While WeWork will no longer be operating the WeLive space at these locations, WeWork is incredibly grateful to have been a part of the WeLive NYC and Crystal City communities and is excited for their future success under Rudin Management and JBG SMITH’s continued leadership, respectively," the spokesperson wrote in an email.
WeWork's spokesperson said it turned over management of the Crystal City WeLive in April and the Wall Street WeLive in June. The Crystal City location at 2221 South Clark St. in Arlington, near the under-construction Amazon HQ2, has been taken over by co-living operator Common, the company announced Wednesday.
"We're so thrilled to have a presence here and bring Common's brand to Arlington," Common CEO Brad Hargreaves said in a release.
The Manhattan location at 110 Wall St. is currently being managed by Rudin, the landlord confirmed to Bisnow. A Rudin spokesperson said WeWork is still operating the coworking location in the building.
"We recently finalized an agreement with WeWork to assume all management responsibilities and operations for its existing co-living community at 110 Wall Street," the Rudin spokesperson said in a statement.
WeWork moved its first residents into the WeLive Wall Street location in January 2016, when about 80 WeWork members and employees began testing the concept in Rudin's building, which had been heavily damaged by Hurricane Sandy.
Rudin spent $160M renovating the 27-story building, 21 floors of which are dedicated to co-living. The Manhattan-based commercial landlord placed the building on the market in 2019.
The WeLive Crystal City location opened in May 2016 in another converted vacant office building where WeWork also opened a coworking space. WeWork announced the closing of that coworking space in January, along with several other closings in the D.C. region.
Around the time of the two openings, WeWork was telling investors that by 2018, it projected WeLive would grow to a 10.4M SF portfolio housing 34,000 residents and bringing in $606M, 21% of WeWork's total projected revenue, according to documents published by Buzzfeed News.
But after opening the two locations in 2016, WeWork East Coast General Manager Dave McLaughlin said at a Bisnow event that October that the company planned to wait until the concept was "10 times better" before opening more locations. It had already slashed profit projections for WeLive by then, and it had resolved to only open new locations in ground-up developments.
It then signed a deal for a third location in Seattle in August 2017, but that deal fell apart in October 2019 after WeWork's failed IPO attempt. The coronavirus pandemic further disrupted the co-living business model, and in June 2020 Bloomberg reported that WeWork was considering ending the co-living brand.
WeWork announced another attempt at going public in March, using a Starwood Capital-backed special purpose acquisition company in a deal that valued it at $9B and is expected to close in the coming months.
While WeLive is disappearing, along with many other co-living brands, Common is continuing to grow.
The 216-unit Crystal City space, now branded as Common at National Landing, will have co-living rooms starting at $1K a month, the company said. Common has eight other co-living spaces in the D.C. area, including a Union Market-area building it took over in April from competitor Quarters.
Common Senior Managing Director of Real Estate Amalia Paliobeis told Bisnow in April the company had taken over 2,000 units from other property managers over the past 12 months, and it planned to take over another 1,500 in the next year. She said the company has been able to grow while its competitors shrink because of its management agreement model, which creates less risk for the co-living operator than a master lease.
"We’re continuing to grow exponentially, and we have a team that’s ready and working with a lot of different owners to take over traditional assets and also co-living assets," Paliobeis said in April. "We're still seeing the aftermath of some of these co-living competitors that have gone under, and we’re still getting those inbound."
WeWork signed long-term master leases for both 110 Wall St. and 2221 South Clark St. It is unclear the terms under which those agreements were unwound.
JBG Smith Executive Vice President Tiffany Butcher, in a press release Wednesday, said the owner sees Common as a convenient housing option in National Landing, the neighborhood around Amazon HQ2 where it is spearheading a host of mixed-use development.
“As an owner and manager of thousands of rental apartments throughout the region, we know firsthand the importance of providing housing options that are tailored to the needs of our customers," Butcher said. "Common offers a best-in-class coliving experience that will complement and enhance housing options in National Landing.”