ReutersTwo of WeWork’s biggest rivals are cashing in on the collapse of its initial public offering, its rescue by SoftBank, and its ongoing overhaul.
“Thank you, WeWork,” IWG CEO Mark Dixon told Fast Company, adding that the coworking startup’s public meltdown had directed a spotlight on shared workspaces.
“Landlords are considering going in our direction that maybe weren’t before,” CBRE’s chief executive, Robert Sulentic, said on an earnings call this month.
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Two of WeWork’s biggest rivals are cashing in on its public meltdown.
“We’re in a hypergrowth stage at the moment,” Mark Dixon, the CEO of IWG, told Fast Company. The collapse of WeWork’s initial public offering, the coworking startup’s rescue by SoftBank, and its ongoing overhaul are helping IWG — which boasts 3,500 global locations to WeWork’s 625 — to expand and acquire smaller competitors, he said.
WeWork’s troubles have “led to more demand for us” and “created an even brighter spotlight on the industry,” Dixon said during a trading update this month. “The knowledge of the industry went up by many notches during that whole period.”
IWG is weighing several acquisitions and expects more prospects next year “as the market inevitably consolidates in the post-WeWork scene,” he added.
“Our strategy has been greatly helped by the focus that they have put [on flexible office leasing], so we are grateful to them for that,” Dixon told Fast Company. “Thank you, WeWork.”
CBRE has also benefited from WeWork’s bad press. The world’s largest commercial real-estate services firm has received more interest in Hana, a coworking business that it launched in Dallas last quarter and plans to expand to California and London by early next year.
“We’re seeing some incremental inquiries from occupiers of Hana,” CEO Robert Sulentic said on an earnings call this month. “Landlords are considering going in our direction that maybe weren’t before.”
CBRE may be winning from the fallout, but Sulentic argued WeWork attracted a disproportionate amount of attention in a Bloomberg interview this week.
“I think that story got a little overtold for a bunch of reasons,” he said. “WeWork was doing a lot of leasing in New York and London and some other markets but we’re the biggest leasing company in the world.”
Sulentic added that coworking only generated 4% of CBRE’s leasing revenue over the past year, but he expects the industry segment to grow from about 2% of multi-tenant office space today to as much as 10% in the coming years.