WeWork Launches Fund To Becomes Its Own Landlord
After years of planning, WeWork is creating an investment fund called ARK aimed to raise billions of dollars to buy stakes in buildings where it will become a major tenant. While the firm has largely followed the leasing space model, it hopes that buildings will become more valuable with their locations in them.
The plan is for the fund to start with $2.8 billion, with $1 billion from Canadian real estate investor Ivanhoé Cambridge Inc.
The fund’s pitch to investors will focus on the safety of having a large tenant ready to go, but will also be going on pure faith in WeWork.
“People actually want to be in the office, actually want to be together. They feel a little bit like home,” said Sylvain Fortier, Ivanhoé Cambridge’s chief investment and innovation officer. “I bet you that sooner rather than later, a WeWork-branded building will be attracting other tenants the same way you will never have a vacant space next to an Apple Store.”
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WeWork has faced criticism in the past for renting space from buildings partially owned by CEO Adam Neumann, and for that reason, he said he plans on transferring some of his own real estate holdings to the fund for the cost he purchased them.
While ARK will run separately from WeWork’s main office-leasing business, it will still have the same executive control under The We Company.
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