WeWork will partner with New York real estate company RXR on a joint project to inject 90,000 square feet of (presumably) office space into 75 Rockefeller Center in New York. As reported by the Real Deal yesterday. It’s a new model for WeWork, where the company will split tenant revenue and renovation costs with the landlord. A large, yet-to-be-revealed corporate client is set to take over the entire office space. The news rides on the coattails of three other recent interrelated announcements, that together lend further clues to the future direction of The We Company + the future of urban lodging and real estate more generally.
WeWork is now part of parent company The We Company. The rebrand was announced in January and expanded the scope of the full business model to include WeWork - the flexible office space solutions provider, WeLive - the accommodations division which has, until now, been slow to expand, and WeGrow - the education and workforce training division which currently includes an elementary school and The Flatiron School.
WeWork files S-1
The We Company has also announced that it has confidently filed for IPO. The big takeaways here are ambition and momentum. Other recent IPO-hungry unicorns e.g. Uber and Airbnb have aggressively pushed outside of their original value proposition to prove to investors of their potential to scale globally: Uber’s push into urban mobility with Lime and Jump bike investments + aggressive push into food delivery with UberEats. Airbnb’s various recent moves into traditional hotels with HotelTonight acquisition, partnership with channel management group Siteminder; expansion into property management with Luckey Homes. The We Company’s run-up to IPO will likely showcase various strategic plays across its three divisions in order to clarify the bigger vision to be more than just an office space leasing company.
Airbnb announces similar partnership RXR
Last week, RXR and Airbnb also announced a partnership to operate 200 hotel-style units in the same 75 Rockefeller building. This is likewise a first for Airbnb, which has increasingly pushed to innovate on the supply side. These particular units will be part hotel and part extended residences with fully stocked kitchens and other building amenities e.g. private social club and concierge. Convene is another flexible office space operator currently residing at 75 Rockefeller.
75 Rock will be a powerful case study for both We and Airbnb. Expect more of these tie-ups with landlords in the key urban areas. Airbnb has plans to do more with RXR. The We Company has spent the last ten years aggressively building a global lease portfolio of prime real estate. These relationships will prove valuable in scaling the WeLive devision. Read here for more analysis. What would a partnership between We and Airbnb look like? The We Company is in a good position to realize a full-package real estate solutions model for corporates that stretches office and lodging.
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