Rivals to WeWork Inc (NYSE:WE) in the UK are already eyeing up its prime properties following its bankruptcy last night.
London-listed IWG PLC (LSE:IWG), which runs Regus and Spaces, told reporters it has already acquired some ex-WeWork sites and is on the lookout for more.
Mark Dixon, IWG’s chief executive, added he also expects to get more customers from WeWork’s collapse as it would likely lead to higher rents for remaining tenants.
“Part of their problem is that they have not been pricing to make a margin, in fact, they have been pricing in some cases to lose money,” he told investors.
“Them pricing normally to make a margin would be helpful [to us].
WeWork filed for Chapter 11 bankruptcy proceedings in the US overnight to protect it from creditors as it works out a way to trade out its billions of dollars of debts.
Once valued at almost US$47 billion, the firm's equity is now worth less than US$50 million.
In its bankruptcy filings, the firm said it had liabilities of up to US$50 billion.
Another Softbank disaster
Softbank-backed WeWork has faced numerous hurdles since its failed initial public offering (IPO) in 2019, including ongoing losses and significant debt.
Concerns over the viability of its business model of taking on long-term leases to offer short-term office rentals were exacerbated during the pandemic when remote working saw demand for office space rentals decline.
It went public at a valuation of about US$9 billion in 2021 but has since continued to burn through its cash as it struggles to attract members to rent its 700 office spaces.
The bankruptcy will affect operations in the US and Canada but its co-working spaces remained open and operational, including in the UK.
UK offices remain open today, it insisted, telling the BBC in an email that it intended to remain "in the vast majority of our buildings".
In a statement, David Tolley, WeWork's chief executive, said he was "deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement".