WeWork began business by leasing office space and renting desks to New York’s creative set, with unusual work perks such as microbrews on tap and a “community manager” who programs events such as book clubs and Ping-Pong tournaments. It now has 234 locations across 22 countries, company documents show, with a portfolio of short-term co-working spaces, mainly leased from landlords on long-term rental agreements.
Lease flexibility, a major perk for potential WeWork tenants, also poses one of the company’s biggest risks. The company is subject to "mismatched terms" when it takes 10- or 20-year office leases from landlords and then offers companies month-to-month rental options, according to Fitch.
Now I think I get it - attract a bunch of money by marketing itself to investors as a some sort of new economy thing (hip millennial working spaces with Ping-Pong and beer!!!), and use that money to go long on a massive portfolio of commercial real estate leases. Then hope for the best!
Could work. Will work for some people, as is always the case when money is sloshing around.