Miami’s office market continues to be dependent on coworking firms to fill their spaces, but some landlords are concerned that their absorption rate is becoming too much.
WeWork is growing into a one-stop-shop
About one year ago, WeWork announced it would be launching its new branch called Powered By We, a design, renovation and office management service.
This expansion from the company’s original coworking operations gave WeWork the opportunity to come to the customer. Traveling workers could set up shop somewhere better than a coffee shop.
Powered By We was the first step in WeWork’s endeavor into a variety of markets beyond shared workspaces to capitalize on its community.
WeWork currently has a $47 billion valuation thanks to massive funding from SoftBank. These investments have allowed the company to cut costs in a way that landlords can’t. Despite this, market experts are expecting an economic downturn and WeWork’s large spending could lead to even larger losses.
Its rebranding as “The We Company”, which includes its coliving spaces WeLive, WeWork and educational program WeGrow, marked the shift towards a becoming a one-stop-shop for all real estate needs.
Despite its clear path to success, critics believe WeWork is overvalued due to its annual losses.
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“I can see why people would think that,” said Dave Fano, head of growth for WeWork. “If companies can reduce real estate costs and improve their employees’ work experience at the same time then that’s a win-win—regardless of the economic outlook.”
WeWork is also making its mark in the technology world by developing its client-facing office software as well as a suite of internal apps for its own operations. The company says technology sets them apart from other real estate companies.
As fixed offices start to dwindle, WeWork’s network has expanded into big corporations.
For example, global liquor brand Diageo has a variety of spaces throughout WeWork locations. Its New York space is used to host events for its numerous brands, including Bulleit Bourbon and Ketel One.
The We Company might be able to sustain on rent arbitrate even if it’s smaller companies go belly up according to Fano. Now that big companies are The We Company’s biggest revenue driver, will it be enough to withstand an economic downtown?
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