Adam Neumann's Growing Property Empire Includes WeWork As A Tenant
It turns out WeWork CEO Adam Neumann invests in more than just his company, and his investments have some questioning whether or not there is a potential conflict of interest at play.
Neumann personally owns stakes in a number of buildings, including 88 University Place. In 2015, he partnered with fashion designer Elie Tahari to pay $70M for the building near Union Square, The Real Deal reports. WeWork later leased eight floors and now manages these on behalf of IBM.
While some ethical concerns have arisen because of the fact that Neumann owns stakes on both sides of the spectrum — tenant and landlord — many of the investments were made in WeWork's early years. WeWork did not view itself as a landlord at the time and instead pursued an "asset-light" strategy in order to prevent necessary capital from being tied up during its growth years, according to TRD.
WeWork has insisted a review process is in place for any potential conflicts and such transactions are “disclosed to investors,” TRD reports.
As WeWork has blossomed into a cash-flush giant valued north of $20B, it has gotten into the property business as an owner, paying $850M, along with Rhône Capital, for Lord & Taylor's Fifth Avenue flagship store last year.
In addition to his investments in office buildings, Neumann has acquired stakes in everything from startups to a development site, along with a number of luxury properties, including his $1.715M Hamptons home, which he purchased in 2012. He also owns a site in Chelsea rumored to be in line for a future ground-up WeLive development, TRD reports.