WeWork plans to name real-estate industry veteran Sandeep Mathrani as its new chief executive, according to people familiar with the matter, a critical step in the company’s bid to rebuild following a failed IPO attempt and the departure of co-founder and former CEO Adam Neumann.
Mr. Mathrani, previously chief executive of Brookfield Property Partners’ retail group, replaces Artie Minson and Sebastian Gunningham, who have served as co-CEOs of WeWork parent We Co. since Mr. Neumann stepped down in September.
Marcelo Claure, who currently serves as executive chairman of We, will remain in that role. Mr. Mathrani, whom he recruited, will report to Mr. Claure, the people said. SoftBank Group Corp., where Mr. Claure is an executive, committed billions of dollars to the office-rental startup in an October financial-rescue package.
Mr. Mathrani is expected to join with Mr. Claure and bring real-estate expertise to WeWork, while Mr. Claure focuses on growth.
Get a daily, guided tour of the best scoops and stories in The Wall Street Journal. Sign up for The 10-Point newsletter.
Mr. Mathrani will start on Feb. 18. Mr. Claure plans to relocate from Miami to New York, where WeWork is based, in the coming weeks.
The decision to choose Mr. Mathrani—who at Brookfield ran one of the nation’s largest mall owners—adds to WeWork’s image as a real-estate company focused on leasing office space. Under Mr. Neumann, it positioned itself more like a technology startup with a sprawling array of businesses from an entrepreneurship-focused elementary school to event-planning site Meetup.com.
It will begin a new chapter for a company that has become synonymous with excess among privately funded startups. In early 2019, just months ahead of its eagerly anticipated listing, WeWork received funding from SoftBank that valued it at a staggering $47 billion, making it one of the nation’s most highly valued startups.
But after public investors balked at paying anything near that valuation amid questions about WeWork’s governance, Mr. Neumann’s quirky stewardship and the company’s business prospects, the IPO was pulled and SoftBank put in new money at a valuation of just $8 billion.
Since then, SoftBank has worked on a five-year business plan that it expects will get the company to profitability and allow it to be cash-flow positive by 2021, according to a person familiar with the matter. As part of that plan, WeWork will continue to open new locations, the person said.
WeWork has roughly $2 billion to $2.5 billion in additional cash beyond what SoftBank has allocated for the plan, the person said.
Since the bailout, Mr. Claure has played a central role running the company, working there on a nearly full-time basis.
A big part of Mr. Claure’s job has been hunting for a new chief executive. He at one point considered T-Mobile US Inc. Chief Executive John Legere, according to people familiar with the search.
Mr. Mathrani is a well-known figure in the commercial-property world and previously served as CEO of mall giant GGP Inc. after the company emerged from bankruptcy protection in 2010. Its stock price surged as the economy recovered after the financial crisis, and the company was ultimately purchased in 2018 by Brookfield, one of its largest investors. Mr. Mathrani remained in charge of Brookfield’s retail portfolio under the new ownership.
His challenge at WeWork is likely to be far different than that of a mall owner coming out of a recession. For years, WeWork had been expanding far too aggressively to come anywhere close to turning a profit--it lost $1.3 billion on $934 million of revenue in the third quarter.
Since Mr. Neumann left, Messrs. Minson and Gunningham sought to throttle back the pace of growth, but the company is a slow ship to steer. WeWork is still expanding far faster than executives there would prefer, as it still is spending heavily to renovate and open numerous new office locations that it leased in the final months of Mr. Neumann’s tenure.
The company has largely stopped signing leases and executives have also considered backing out of some in locations such as in China, people familiar with the discussions have said.
Should the men prove able to control costs and manage growth, the basic business is still considered viable. Other companies in the office-subleasing market including IWG PLC have been profitable for years. WeWork’s heavy spending in the past decade has made it the best-known brand in the industry, and the company already houses thousands of employees from some of the nation’s fastest-growing companies, like Amazon.com Inc. and Facebook Inc.
Write to Maureen Farrell at maureen.farrell@wsj.com, Eliot Brown at eliot.brown@wsj.com and Dana Mattioli at dana.mattioli@wsj.com
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
https://news.google.com/__i/rss/rd/articles/CBMia2h0dHBzOi8vd3d3Lndzai5jb20vYXJ0aWNsZXMvd2V3b3JrLXBhcmVudC10by1uYW1lLXJlYWwtZXN0YXRlLXZldGVyYW4tc2FuZGVlcC1tYXRocmFuaS1uZXctY2VvLTExNTgwNTc2ODIw0gEA?oc=5
2020-02-01 17:07:00Z
CAIiENsljaPiP72HnBryRCp-DLgqGAgEKg8IACoHCAow1tzJATDnyxUwiqe0AQ
Bagikan Berita Ini
0 Response to "WeWork Parent to Name Real-Estate Veteran Sandeep Mathrani New CEO - The Wall Street Journal"
Post a Comment