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WeWork’s $47 Billion Valuation Ahead Of IPO Defies Critics

WeWork has received a $47 billion valuation ahead of what will probably end up being this year’s largest IPO, just after Uber.

Despite this massive valuation, some critics find it to be grandiose at best. The unicorn has yet to make a profit, but its large international footprint has undoubtedly disrupted the workspace model.

Although WeWork owns minimal property due to its leasing model, its market value is almost twice the size of the largest U.S. developer of Class A office buildings, Boston Properties.

Zack Aarons, cofounder of real estate tech venture capital firm MetaProp, said that not having the burden of physical assets actually acts in the company’s favor.

“Everybody wants to get the same multiple that WeWork has,” Aarons said. “Every traditional landlord is saying: ‘How do I get the Street to view me more like WeWork?’”

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The digital economy has slowed demand for office space, but what is left of demand can be seen in the coworking and flexible office industry.

Firms like WeWork appeal to startups and remote workers seeking short-term leases, but it’s critics say that it’s continuous losses and reliance on revenue from these contracts could hurt it in the case of an economic downturn.

Regardless of critics, it is clear that flex space will become a permanent fixture for a few simple reasons: renting and scaling can be done with ease; it benefits work ethic; and for the first time, workers get to call the shots in their work atmosphere.

ABOUT Aayat Ali
Aayat Ali

Aayat is an editor for the Daily Digest based out of Kentucky. She has worked with local coworking spaces since August of 2017 and enjoys taking her firsthand knowledge to write about the fascinating, constantly evolving world of flexible workspaces. Feel free to reach out to her at [email protected] View all posts by Aayat Ali

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