Some European lenders are taking a step back from coworking company WeWork, who currently has 45 million square feet of office space worldwide.
WeWork has taken advantage of the rising gig economy with its flexible offices filled with modern design that even corporations find appealing. When Japanese-based conglomerate SoftBank caught wind of WeWork in 2017, it jumped aboard the investment train and has since committed over $10 billion into the company.
Despite this seemingly match made in real estate heaven, SoftBank backed down from a pledge of $16 billion earlier this year, which led many lenders to feel weary.
“When you have an investor saying it’s going to commit massive amounts, and then the reversal is so great, you would naturally be concerned about what has gone on to cause that,” said Simon Brooks, co-head of structured property finance at Investec Plc, a real estate lender that has financed WeWork buildings in London.
Vice Chairman Michael Gross refuted these claims, saying that they still have a lot of deal flow of assets being resold or refinanced with WeWork as a major tenant.
Regardless, concern lingers in the air as London is the world’s largest coworking city and is a prime market for the company.