WeWork is offering mammoth discounts to new tenants in New York, a move seen by some as undercutting the co-working market at a time of intense competition.
WeWork is offering a free year of rent for new two-year contracts at 10 locations in Manhattan and three in Brooklyn, as well as six free months of rent for one-year contracts, Crain's New York Business reports. In marketing materials sent to prospective tenants, WeWork also implied that it would offset the cost of company's exiting leases to grease the wheels for a move.
Backed by a deep bench of investors and valued at over $20B, WeWork is the largest co-working company in the world. An anonymous rival executive told Crain's he fears WeWork is starting a "brutal price war" aimed at bullying competitors with smaller bankrolls. WeWork offered the same free rent deal to companies in D.C., Bisnow reported earlier this year.
Custom headquartering firm Knotel confirmed that WeWork has targeted its clients with the new sales pitch, perhaps a retaliation for the former's move to park advertising buses outside a WeWork location with a message to "graduate from co-working."
"Our members are not returning [to WeWork] — they have been at WeWork, and they know that what Knotel provides: tailored, flexible HQs built for fast-growing, culture-rich companies like yours," the company said in an email to its members.
Knotel recently entered into a partnership with WeWork competitor Grind wherein the latter would encourage members to join Knotel when their space requirements outstrip Grind's capabilities. In return, Knotel forwards to Grind prospective tenants it views better suited to co-working.
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