“Substantial doubt exists” about WeWork’s ability to continue to stay in business, due to the company’s losses, projected cash needs, and increased member turnover, according to the company’s second quarter earnings release.
WeWork logo is seen on an office building in Tel Aviv, Israel, on December 29, 2022. View all sponsors
WeWork, which operates coworking spaces, said it will try to lower rent costs by negotiating more favorable lease terms and increasing revenue by reducing canceled memberships as part of its turnaround plan. The company will also attempt to raise more money by issuing debt or equity securities. “Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships,” the company’s interim CEO, David Tolley, said in a statement.
WeWork’s precarious future comes amid a difficult time for the commercial real estate sector. Office and retail property valuations have plummeted since the pandemic made way for a rise in hybrid working. Rising interest rates have also damaged the credit-dependent industry.failed attempt
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