WeWork, Rhone Group Raise Hundreds Of Millions For New Fund To Buy Real Estate
Co-working behemoth WeWork is following through with plans to launch its own investment arm. The $17B unicorn and its partner, private equity firm Rhone Group, raised several hundreds of millions of dollars for a new fund over the weekend.
The new fund is called WeWork Property Investors, and while it has already approached several New York landlords about possible deals, people familiar with the matter said none are close to completion, The Real Deal reports.
This first round of fundraising follows WeWork’s October announcement that it would launch an investment arm to buy several of the buildings it currently leases. Experts said the fund’s success depends on whether investors like the idea of buying into properties where the owner occupies much of the space, and whether they are confident in WeWork’s credit.
These fundraising efforts come shortly after WeWork launched Onsite Solutions, a new business that takes on office giants like JLL and CBRE by offering personalized co-working centers for large corporations. In April WeWork signed a landmark deal with computer giant IBM to manage a full office building in Manhattan. IBM would take up 70K SF of the 10-story, 87K SF 88 University Place, and WeWork would manage the entire space for the lone tenant.
CORRECTION, MAY 8, 12:16 P.M. ET: A previous version of this story incorrectly listed the name of private equity firm Rhone Group. The story has been updated.