These cities are most vulnerable to shocks from WeWork’s woes (hint: not New York or San Francisco).
The cities most vulnerable to fallout from a pullback in the office co-sharing craze that was sparked a decade ago by the real-estate venture WeWork and its rivals aren’t who you might suspect, according to a new report.
Those cities include major metropolises including Miami, Los Angeles and Denver, according to the report. This map shows which U.S. cities have a higher risk to fallout if the economy slips and the market for office-sharing real estate cools. “Should unemployment increase, we would expect the use of co-working spaces to decrease, leading to a drop in revenue across the entire sector,” wrote Dittmer. “Poorly capitalized co-working firms may shutter, and larger firms may seek to sublease or terminate leases.”
On Tuesday, WeWork’s new leadership said the company had secured a $1.75 billion credit facility from a group of banks led by Goldman Sachs. Management also spelled out targets for the company to be free cash flow positive in 2020 and to reach 1 million memberships in 2023, up from roughly 660,000 currently.
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