From the start, WeWork offered a somewhat uneasy combination of its founders’ ambitions and co-working’s communal roots. Neumann describes WeWork as a “capitalist kibbutz.” Members are encouraged to mingle, network, and leverage one another’s talents, frequently under the auspices of a corporate sponsor: Witness taco pop-ups promoting internet phone service; talk-therapy circles sponsored by a women’s activewear brand; cocktails served up by the payroll-software giant ADP. Billed as community-building programming, the events can feel more like exercises in targeted advertising, with members as the marks. Genuine connections do occur—sometimes at happy hours and often through WeWork’s online member network, where people share marketing tips, sell furniture, organize cryptocurrency seminars. (The variety of requests never ceases to amaze. Quickly fulfilled: “Any WeWork salted cured meat companies?” Apparently unfulfilled: “Can anyone refer me to a good venture capitalist in the NYC area?”)
Despite the company’s occasional excesses, WeWork offices are more pleasant than many a soulless cubicle farm, according to people I spoke with at locations in New York; Washington, D.C.; Boston; and Los Angeles. “People are relaxed. No one’s watching the clock,” says Liz Granda, who works for Brooklyn Paws, a concierge service for pet owners, in a WeWork under the Manhattan Bridge. The relentlessly cheerful vibe encourages members to be social, or at least forces them to be nice. Nicole Shore, the principal of Zero to Sixty Communications, a boutique PR firm, has rented desks in locations around the country. She told me she got to know her go-to graphic designer at a WeWork Christmas party. At its best, with its abundant conveniences and event-directing community managers, WeWork can feel like an all-inclusive cruise.
Cruises, of course, aren’t for everyone. Many observers in the real-estate industry say WeWork is wildly overvalued, and its aggressive expansion plans unrealistic. Although it has reportedly begun raising money for a real-estate-investment fund, the company owns few physical assets. Its practice has been to sign long-term leases en masse, striking multiproperty agreements to get the best deals with landlords, then renting spaces at a premium. (Many members told me that, per square foot, WeWork is considerably pricier than a traditional rental, but that they’re willing to pay extra for the turnkey flexibility and sense of community.) It’s a classic lease-arbitrage model, which business-school professors will tell you carries significant risk: Whenever the next economic downturn hits, demand for office space may retreat, leaving WeWork with a lot of empty desks and multiyear leases to pay.
Investors have seen this movie before. IWG, itself a network of flexible office spaces, expanded rapidly in the 1990s (it was known as Regus at the time) on a wave of high-hope investment, only to seek bankruptcy protection after the dot-com bust. What distinguishes the younger player, really, besides charismatic leadership and lofty rhetoric? “WeWork is nothing but Regus with a paint job,” one industry veteran told The Wall Street Journal. Many investors have placed their bets because they’re dazzled by Neumann, Konrad Putzier, a real-estate reporter at The Real Deal, told me.