The company signed just four new domestic leases in the fourth quarter, and its total leased space fell from an average 2.54 million square feet to 184,022 square feet, according to a CBRE report released by CNBC.
“We had seen this coming right after the IPO news,” Julie Whelan, senior director of research at CBRE, told CNBC.
What It Means For WeWork
With that 93% decline, WeWork ceded market leadership to IWG’s Spaces, which posted 284,916 square feet of leased space. Altogether, WeWork's market share fell from 69% to 18%.
The drop in rankings reflects continued deterioration of the company’s independent prospects. In October, it received $5 billion in financing from SoftBank and turned over 80% control to the Japanese conglomerate.
In November, WeWork announced 2,400 layoffs amounting to 19% of its workforce. It plans to shutter its WeGrow school and redirect its focus to large businesses.
CBRE attributes WeWork’s struggles to the market entry of landlords who previously eschewed short-term, flexible leasing.
'Flexibility Is A Big Part' Of Landlord Portfolios
In the wake of WeWork’s stumble, Whelan expects more building owners to adjust their models to accommodate short-term office leasing.
“It took these flexible office operators for landlords to wake up and realize that flexibility is a big part of their portfolio and something that occupants are demanding,” Whelan said. “The ways landlords will be delivering flexibility to the market is shifting.”
'I Regret It In Many Ways:' SoftBank Chairman On WeWork Investment
SoftBank B Bailout Bid For WeWork Stuck As Banks Considering 'Credit Risk'
Photo courtesy of WeWork.
See more from Benzinga
- Morgan Stanley Downgrades Tesla On Risk, Valuation Following Massive Stock Run
- 10 Most Trusted Brands In America: US Postal Service, Amazon Top The List
- BlackRock CEO Larry Fink Says Climate Change Means Capital Markets Will Shift 'Sooner Than Most Anticipate'
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.