After WeWork’s implosion, the company’s biggest rival in New York is finding an opportunity to bask in the limelight.
Knotel has long poised itself as the more mature, trustworthy alternative to WeWork. However, it is struggling to convince the public how its core business of leasing and subletting space is different than its disgraced rival.
Now, ramped up criticism of the company’s vacancy rates, plummeting leasing activity and layoffs has led CEO Amol Sarva to offer more clarity into how the company is doing. Still, Sarva has downplayed the criticism, stating that vacancy rate is a performance measure used by the traditional real estate industry.
“Knotel is on a good track,” said Barry Gosin, CEO of Newmark Knight Frank, which has invested into Knotel. “They have slowed their activity to achieve their goal of profitability.”
Sarva recently provided rare insight into his company’s financials, saying that it had $350 million in contracted annual revenue and is on track to profitability. Withthis, he claimed that Knotel would be “cash-flow break even” by the end of 2020.
One of the biggest differentiators between Knotel and WeWork are their clients. Knotel caters to enterprises such as Microsoft and Starbucks, whereas WeWork gears their services to startups. But as WeWork has gathered more enterprise clients of its own, the distinction it becoming harder to make.
“I’ll spend some time on Knotel, flexible office, real estate, what happened last year, and what to expect this year,” Sarva said in an email to colleagues. “I suspect some press will even have questions for me.”