WeWork, one of the leading global flexible space providers, shared a business update highlighting strong sales momentum and accelerating recovery trends through April and May. As vaccine distribution expands, global restrictions ease, and companies begin to action their hybrid return-to-work strategies, WeWork continues to see an improvement in leading indicators such as desk sales, churn rates and occupancy across its portfolio.
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Among the highlights for the first two months of Q2 2021 are:
Company Operating Results:
- As of May, WeWork’s global real estate portfolio included 767 locations across 38 countries, supporting 947,000 workstations and 505,000 total memberships.
- Gross desk sales were approximately 33,000 in April and 39,000 in May.
- Total occupancy increased to 53% as of May, up 3 percentage points since March.
Space-as-a-Service Sales Update:
The initial pace of recovery seen in the first quarter of 2021 has carried over into the first two months of the second quarter, as gross desk sales reached 33,000 in April and 39,000 in May, equating to approximately 4.3 million square feet of signed space so far this quarter. April and May marked WeWork’s strongest two months of net desk sales since September 2019, with net desk sales of 10,000 and 17,000, respectively, driven by strengthening sales momentum and declining churn rates, which have returned to pre-pandemic levels. The company also recorded positive net desk sales in all consolidated regions, demonstrating the global nature of recovery and accelarating demand for WeWork’s hybrid solutions. 97 out of 112 total markets have increased in occupancy from their low point during the pandemic.
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Digitization of Real Estate – All Access and On Demand:
WeWork continued to see strong growth across WeWork’s All Access and On Demand products, with All Access memberships increasing from 15,000 in March to nearly 20,000 in May as we continue to sign strategic partnerships.
Platform – Asset-light Model:
WeWork continues to pursue franchising and other capital-light partnerships opportunistically. In April, the company finalized its franchising agreement with AMPA, a long-time local regional partner, for WeWork’s Israel assets, and in May, WeWork announced a joint venture with SoftBank Latin America Fund that provides SoftBank Latin America Fund with the exclusive right to operate the WeWork brand in Argentina, Brazil, Chile, Colombia and Mexico. Pro forma for this transaction, the company’s joint ventures and partnerships across China, India, Japan, Israel, and Latin America represent 212 locations across 11 countries, supporting 281,000 desks and 162,000 memberships.
Portfolio Optimization Update:
Through the first two months of the quarter, WeWork has also continued to optimize its real estate portfolio and expense structure through building exits and lease amendments. Since March, the company has completed an additional 17 exits and 51 amendments and expects to be substantially complete with its optimization efforts by the end of June.
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