WeWork Names Veteran Real Estate Executive as New Chief

The naming of an experienced real estate executive is a clear indication that WeWork is moving on from Mr. Neumann’s strategy of building a sprawling company with lofty aims that included transforming how people work and live together. He had promoted WeWork as if it were a groundbreaking technology company set on upending its industry. The firm had also branched out well beyond office space, establishing sleek dormitories for working professionals and even a private school in Manhattan.

WeWork withdrew its much anticipated initial public offering in September. SoftBank, WeWork’s largest outside shareholder, agreed in October to bail out the company. Marcelo Claure, a senior SoftBank executive, became WeWork’s executive chairman and has been overseeing the company’s overhaul, which involves pulling back from certain markets, selling off noncore businesses and finding new ways to finance its operations. Mr. Claure will continue as executive chairman.

Mr. Mathrani, who did not respond to a request for comment, faces some daunting challenges, not least the struggle to fill all the new locations that WeWork expects to open in 2020. The company has said that it could open 600 spaces this year, almost doubling the size of its network.

Commercial real estate executives said Mr. Mr. Mathrani probably had strong relationships with large landlords, which might prove useful as WeWork goes through its restructuring. In an interview in December with The New York Times, Mr. Claure said WeWork might seek to renegotiate leases with building owners at some locations. “We’ve been very straight with landlords and said, ‘Look, this is its own independent business,’ and if things don’t work out, sure we’ll have conversations with landlords,” Mr. Claure said. “There will be some of that that’s starting soon.”

Commercial real estate executives also said that Mr. Mathrani’s experience in retail could prove particularly valuable. In retail, the goal is to create locations that customers want to keep coming back to. WeWork would benefit if its customers stayed in locations for longer. A big weaknesses in the company’s model is that it leases space from landlords for far longer than its customers rent space in WeWork locations.

Article source: https://www.nytimes.com/2020/02/01/business/wework-chief-executive.html?emc=rss&partner=rss