WeWork Mexico, what's next?
A paradigm of both soaring ambition and stark challenges.
The intricate tapestry of WeWork's journey, its tumultuous period from 2019 to 2020 marked by a failed IPO and reputation setbacks, resilience amid the COVID-19 pandemic, strategic maneuvers, including the spin-off of its Latin American business, LatamCo, and its eventual public listing.
WeWork's challenges and changes
Failed IPO and reputation issues (2019-2020): WeWork faced a failed IPO and reputation damage.
Impact of COVID-19 pandemic: The pandemic made it difficult to sell office spaces.
SoftBank's ownership and decisions: SoftBank, owning 80% of WeWork since 2019, merged WeWork with a SPAC for share selling.
Spin-off of Latin American business (LatamCo): WeWork spun off its Latin American business into LatamCo before the merger.
Public listing exclusion: When WeWork went public, its Latin American locations and liabilities were excluded from the balance sheet.
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WeWork's operations in Latin America
Presence in Latin America (2021): WeWork had about 90 locations across 18 cities in Latin America.
Occupancy rates: Approximately 50% occupancy rate in Latin American locations.
Ownership and contributions to LatamCo: LatamCo was owned by the Latin America Fund and WeWork, with both contributing funds and resources.
Franchise agreement: LatamCo operated under a franchise contract, using WeWork's brand and technology platform.
WeWork's business model and strategy
Rapid expansion with investments: Received about $6.5 billion in investments by 2019 for rapid growth.
Unique real estate strategy: Occupied entire buildings, unlike other coworking companies.
Clientele: Attracted large clients like Santander, Twitter Mexico, and Salesforce.
Operational challenges: Faced issues with promotional discounts and over inventory.
Industry constraints: Struggled with the real estate sector's long-term and inflexible contracts.
Evolution of coworking spaces
Historical development: From 'executive suites' in the 70s and 80s, to 'business centers' in the 90s, and to coworking spaces in the last 10-15 years.
IOS Offices and post-pandemic trends
IOS Offices: Founded in 2006, focused on premium office spaces for long-term clients.
Post-pandemic demand: High demand for office spaces, especially in the USA.
Trends in work models: Trends favoring hybrid work models and flexible, shorter leases.
