Adam Neumann Puts WeWork-Occupied Building He Owns Up For Sale

88 University Place in Greenwich Village
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88 University Place In Manhattan, A Wework Building Entirely Subleased To Ibm

The impact of coworking on the value of a building is still relatively unknown, but moves from WeWork CEO Adam Neumann himself could shed more light on the subject.

Neumann plans to list an office building that is almost fully leased to WeWork for more than $110M, The Real Deal reports.

He owns the property at 88 University Place as a personal investment through a group controlled by fashion designer Elie Tahar, per TRD. He decided to market the building to reduce possible conflicts of interest ahead of The We Company’s initial public offering, which could be happening as soon as next month.

The group paid $70M for the property four years ago, and Neumann owns a 50% stake.

WeWork has most of the space in the 90K SF building, which it manages for IBM. Office landlords in the city are dealing with coworking companies’ increasing hold on the office leasing market, and many are questioning how much exposure to coworking is too much.

So far, there has been little data on how buyers view a building that is heavily leased to a coworking provider and 88 University Place could act as a test case in the city, although WeWork's arrangement to IBM could make it an imperfect comparison.

Earlier this year, Rudin Listed 110 Wall St., which is net leased to WeLive and WeWork, but pulled it from the market after it reached a deal to sell another building. However, the building’s reliance on WeWork was noted as a possible risk in marketing materials, per TRD.

In Washington, D.C., a new office building that is fully leased to WeWork sold for over $1K per SF earlier this year. That price was a near-record for a D.C. office building, but so far no other building with large coworking components have reached that pricing.

“The common opinion is it’s still something investors and underwriters are watching, they want to have some sort of threshold for a portfolio whether it’s 20% or 30%, but they want to manage their exposure to it,” CBRE Senior Manager of Research Wei Xie told Bisnow at the time.

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