WeWork says demand for space exceeds pre-pandemic levels

San Francisco

WEWORK, the office-rental company most closely associated with entrepreneurial excess, has seen demand bounce back in the aftermath of the Covid-19 pandemic and inquiries from potential customers exceed what they were before nationwide lockdowns, its executive chair said.

"The demand for WeWork space today is higher than it was prior to the pandemic," said Marcelo Claure, who is also chief operating officer of SoftBank Group, WeWork's biggest investor, at the Bloomberg Businessweek virtual summit. A spokeswoman for WeWork said revenue had recovered after a pandemic dip. "Sales are back to pre-pandemic levels, and our sales pipeline is strong," she wrote in an e-mail.

WeWork attempted an initial public offering two years ago, but the deal imploded after investors lost confidence in its former chief executive officer (CEO), Adam Neumann, and its lofty US$47 billion valuation. After its very public meltdown, the company retrenched, cutting thousands of jobs.

Now, WeWork is again seeking to go public, this time with a new CEO, real-estate veteran Sandeep Mathrani, and on the Nasdaq via a US$9 billion merger with a special purpose acquisition company, BowX Acquisition. Shares of BowX rose 7 per cent on Tuesday after Mr Claure's comments. Covid-19 shutdowns gave WeWork a chance to "reinvent" itself, he said, prompting the company to slash costs. In March, WeWork said revenue excluding China for 2021 was estimated at US$3.2 billion, on par with 2020 and 2019.

Now, as more employers experiment with bringing workers back to the office on flexible schedules, WeWork said it is ready. Customers "are basically sending us their employees because they don't know how many days they're going to be working", Mr Claure said. Because many companies are reluctant to sign long-term leases, WeWork's flexible terms hold greater appeal, he added. BLOOMBERG