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Here’s what you need to know today:
- Welcome Back, WeWork
- Former The Wing CEO Acknowledges Inequality
- EMEA Sees Boost In Flexible Office Takeup
- Regus Expands New York City Lease
- WeWork Closes Three Washington D.C. Locations
Welcome Back, WeWork
The We Company revealed this week that it will go by its birth name of WeWork again.
The coworking operator, which got its start back in 2010, rebranded as The We Company in January of 2019 after it endeavored into several other industries, including education and residential.
“This announcement marks the latest milestone in the company’s efforts to focus on its core product and cement itself as a global end-to-end business solutions leader,” the company said in a blog post.
WeWork has been aiming to rebuild its tarnished reputation after facing mass criticism over its efforts to go public with a $47 billion valuation.
Additionally, reports of booze-ridden parties and former CEO Adam Neumann’s inability to control his spending habits led the company to completely revamp its operational structure. This included ousting Neumann and walking away from its IPO.
The pandemic has also impacted the coworking firm, as vacancies continue to plague the company’s workspaces all over the world.
Former The Wing CEO Acknowledges Inequality
The Wing’s former CEO Audrey Gelman posted a letter that she sent to previous employees of the female-oriented coworking firm last week.
In the letter, Gelman, who resigned in June, apologized for not protecting the women of color who faced poor treatment at the company.
She added that her desire to be successful and scale quickly cost the company a healthy culture that reflected the firm’s core values.
She also said that The Wing had done a poor job in tackling the systemic racism that has roots in the hospitality industry. Rather, they camouflaged it in pastel pinks.
“Members’ needs came first, and those members were often white, and affluent enough to afford The Wing’s membership dues,” said Gelman. “White privilege and power trips were rewarded with acquiescence, as opposed to us doubling down on our projected values.”
She expressed that The Wing reinforced the institutional inequality that women of color, namely Black women, face in the workplace.
The company’s insincere portrayal of intersectional feminism led former staffers to form the Flew the Coup group, in which they demanded a public apology from Gelman and COO Lauren Kassan.
“Collectively, we have faced racism and anti-LGBTQIA rhetoric from management, HQ staff, and members,” the group wrote on Instagram in June. “We have faced physical and psychological violence within the various Wing locations, and discrimination when attempting to move up within the company.”
The group is now raising money for those who have been laid off from The Wing in recent months, with a goal of raising $100,000.
EMEA Sees Boost In Flexible Office Takeup
Colliers has released their new ‘Flex Forward’ report that touches on how markets across Europe have seen a boost in flexible workspace takeup during the first half of the year.
According to the report, cities such as Hamburg, Moscow, Vienna and St. Petersburg accounted for 30% of total office take up.
While there was still a significant amount of commitment cancellations, around 162,000 square meters of flexible offices opened.
“The office has been a key focal point of the pandemic as across the world people have suddenly found themselves working in a new environment, usually at home on their kitchen tables or in dedicated home offices,” said Tom Sleigh, the head of flexible workspace consultancy at Colliers International in the UK. “While the flexible workspace sector has not been immune to the effects of the pandemic there is no need for concern around a sector demise. Instead we are seeing occupiers’ real estate practices becoming more modern and occupiers looking to utilise flexible solutions in the industry to tackle short, as well as medium-term challenges.”
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According to the findings, demand for flexible workspaces in inner cities grew 52% during the first half of 2020, compared to the 38% of the past two years. Additionally, demand for offices in suburban areas grew to 16% compared to the previous 12%.
Regus Expands New York City Lease
Regus has signed an additional 36,600 square foot lease for a New York City location it has occupied for 15 years.
The seasoned office space provider has been occupying the fifth and sixth floors at 136 Madison Avenue for over a decade now, and the new lease extends its stay until 2031.
“We’ve been obviously active in our portfolio with various members of the office leasing and flex office sector,” said Michael Cohen of Colliers International. “And when the pandemic hit we started having conversations with all of them… We were determined to make these relationships work—particularly in the case of Regus, which is a publicly traded company, has about a billion dollars in revenues, is profitable, positive EBITDA and a track record. Our objective was to make a way for Regus to continue to thrive in our portfolio.”
As part of the deal, Cohen said that rent will shift depending on how the market fluctuates.
This deal is a glimmer of hope for the workspace provider, as just last month it was reported that the company would be putting multiple New York City spaces into bankruptcy.
WeWork Closes Three Washington D.C. Locations
WeWork will close three of its oldest locations in Washington D.C. as the company shifts its focus on its path to profitability and newer spaces.
The company will be closing its Manhattan Laundry, Wonder Bread Factory and 718 Seventh St. NW locations.
“In streamlining our portfolio towards profitable growth, we have decided to move on from WeWork’s Manhattan Laundry, Wonder Bread Factory and 718 7th St. NW locations in Washington, D.C.,” a WeWork spokesperson said. “With numerous excellent WeWork locations in the immediate area, we look forward to providing our members with first-class, flexible space solutions. In consolidating our market footprint, we’re excited to fortify our presence with the very best of our Washington D.C. portfolio.”
Now, the coworking company is looking to relocate the members in those spaces to other WeWork locations in the District.
CBRE And Colliers Release Office Market Reports
Commercial real estate firms CBRE and Colliers International have released varying reports on Silicon Valley’s office, research and development and industrial markets.
Despite their differences, both reports have found that the area is experiencing high vacancy rates and space availability for the office industry. This comes as no shock as millions of people continue to work from home.
According to the Colliers report, Silicon Valley’s net absorption was negative for the third consecutive quarter, equating nearly 198,000 square feet.
Despite this, leasing activity during this time saw an increase due to large office projects being completed, totaling 983,303 square feet.
As of the end of the third quarter, Colliers is tracking 10.8 million square feet that is under construction.
CBRE’s more grim report found that office leasing dropped by 73% during the third quarter in comparison to the same time last year.
Additionally, gross absorption was 680,883 square feet, the largest since the dot-com bubble burst of the early 2000s. Even more, occupancy losses reached nearly 677,000 square feet, which marks the worst performance since the Great Recession of 2007.
However, CBRE also noted that the office market is expected to make a rebound as demand for office space grows.