WeWork Expands Network With Third-Party Partnership
Roughly six months after emerging from bankruptcy, WeWork has announced the launch of its Coworking Partner Network, an affiliate program with third-party operators that will allow existing users to access new spaces in markets across the U.S. and Canada.
The linchpin of the network is a partnership with Vast Coworking Group, a franchiser that operates more than 190 locations across 31 states and 10 Canadian cities. Vast’s existing franchisees, operated under brand names Venture X, Office Evolution and Intelligent Office, will be available through the network to be managed under Yardi’s Kube coworking software.
Additionally, users of WeWork Workplace, the company’s proprietary space management software, will gain access to 75 Vast locations across 50 markets in the U.S. and Canada through the app. WeWork intends on expanding the network across more markets in the future.
In April of this year, Yardi assumed a 60 percent ownership stake in WeWork after the company contributed $337 million of a needed $450 million bankruptcy exit. WeWork emerged from bankruptcy the following month, shedding 170 locations. The company’s current offerings total 600 locations across 37 countries.
Powering the partnership
The Coworking Partner Network is the result of observing trends from both the office and larger coworking sectors, as well as an asset-light approach to operating the spaces, according to Will Sandford, Yardi’s director of coworking. One key motivator was corporate entities in need of flexible space who may not be as concerned with brand preferences as individual users. “(They) expect a large network of high-quality space and are more brand-agnostic than retail customers,” Sandford told Commercial Property Executive.
A WeWork spokesperson pointed to data from a recent user survey showing that of the 72 percent of companies planning to expand their office footprints in the next two years, 59 percent intend to do so through a coworking space.
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Sandford believes that partnerships resembling the Coworking Partner Network allow operators to more seamlessly integrate their spaces into office buildings than the more traditional models used in the 2010s. “The lease arbitrage coworking model of the 2010s is not feasible at scale,” Sandford said.
Conditions like revenue sharing agreements and internal management really drive the partnerships home, in Sandford’s view: “These expansion models will better align the coworking operator with the building owner and provide customers with more location options.”
In addition to the franchising and management structure, WeWork was also attracted to Vast’s suburban spaces, which complement the company’s more urban-centric approach. This year alone, the U.S. added roughly 9 million square feet of suburban coworking space to its existing stock, according to CommercialEdge data.
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