WeWork Plans To Triple Its Real Estate Activity In 2017
WeWork is already a dominant force in office markets around the world, particularly New York, where it is one of the biggest occupiers of office space in the city. The co-working unicorn's global head of real estate said it is going to take off even more this year.
WeWork has 140 open locations in 44 cities in 14 countries, with more than 8M SF of office space worldwide, WeWork global head of real estate operations Matt Fry said at Bisnow's NY Workplace of the Future event Thursday morning.
"We’re going to double that, our real estate footprint, in the calendar year 2017 in terms of openings, and [we're planning on] three times the number of real estate transactions this year as opposed to last year," he said. "Growth is off the charts."
By real estate transactions, a WeWork official clarified it could be something as small as a new floor in a building in which WeWork already has space. The growth will happen globally; in 2017 alone, WeWork launched or will launch in cities like Vancouver, Charlotte, Nashville, Buenos Aires, Rio de Janeiro, Paris, Beijing and Frankfurt.
Fry said the growth has been "fairly simple to date," because the co-working giant has expanded in some of the world's biggest cities. It has become more challenging as it pushes into secondary and tertiary cities that are more suburban in nature and less dense.
"We look for vibrant locations that appeal to our members, with retail, restaurants, bars, health clubs," Fry said. "We place a huge amount of emphasis on that. We do a lot of demographic data, we look at a lot of competing businesses and we have advanced software that helps us predict how WeWork will do."
A big piece of WeWork's growth is working with what it calls enterprise clients, which it defines as companies with more than 1,000 full-time equivalent employees. One of its recent partners is spirits brand Bacardi, which has 35 people in WeWork's Mexico City location.
"At Bacardi, roughly 50% of our workforce is Millennials," Bacardi global vice president of real estate Louise Matthews said. "To move to a WeWork solution where it’s got [a] cool vibe, great architecture and our employees are close to our customers ... It’s been a great opportunity to have marketing synergies."
There are 1,000 enterprise members, WeWork global head of sales strategy and operations Sam Lee said, with some companies placing thousands of their employees in WeWork spaces. Microsoft uses WeWorks when it needs to have employees in new cities. Hong-Kong based HSBC took a full floor in WeWork's first Hong Kong building, placing its innovation team in the location.
"[HSBC] wanted to make sure it had a dynamic, collaborative workplace, and the right space to get access to a Millennial and Gen-X talent base," Lee said.
The event took place at 575 Fifth Ave. in Manhattan, where WeWork just announced it is opening a 60K SF location, the first deal in the building since L'Oreal vacated for Hudson Yards. WeWork has signed dozens of leases in the city over the last two years, and all indications are that landlords who want it in their buildings still have plenty of chances.
CORRECTION, MAY 12, 10 A.M. ET: WeWork is launching this year in Vancouver, Charlotte, Nashville, Buenos Aires, Rio de Janeiro, Paris, Beijing and Frankfurt. A previous version of this story said the locations launched in 2016. This story has been updated.