WeWork is continuing its rapid expansion in Boston. Now it’s taking over entire buildings.
The co-working giant has signed a lease for all the office space at One Milk Street, a newly-rehabbed historic building in Downtown Crossing.
WeWork taking-over all of One Milk St:
https://www.bostonglobe.com/business/2019/06/17/first-for-wework-taking-over-entire-building-boston/0JIMexYzd5FMLoPZbNhOyN/story.html
I was about to be disappointed that the ground floor was going to be office space until I read this: "Shake Shack has signed a lease for space on the ground floor, according to documents filed in Suffolk County."
Win/win.
I was about to be disappointed that the ground floor was going to be office space until I read this: "Shake Shack has signed a lease for space on the ground floor, according to documents filed in Suffolk County."
Win/win.
WeWork taking-over all office space in One Milk St:
https://www.bostonglobe.com/business/2019/06/17/first-for-wework-taking-over-entire-building-boston/0JIMexYzd5FMLoPZbNhOyN/story.html
2. Co-working spaces are a relatively recent trend trend (recent in the sense of becoming extremely popular). Is it not also a risk that we have entire buildings and millions of square feet dedicated to co-working spaces that may run 'out-of-style' in 5, 10, 15 years? A typical office building can be 'easily' reconfigured by the owner for open plan vs. closed plan, depending on trends/tenant needs, but this seems different to me, where WeWork is configuring spaces (and with significant upgrades/renovations, at that) for companies with sizes anywhere between 1-500+.
Anybody more versed in real estate and finance want to provide their opinion on WeWork rapidly taking over office space? I have two naive concerns.
1. The company itself seems to be going through rapid growth, but with it, burning through capital just as rapidly. They doubled their net loss in 2018. This year The We Company restructured to include WeWork, WeGrow, and WeLive. With an IPO coming up and continuous growth, isn't this a big risk for a very large portion of Boston real estate to be dedicated to WeWork in the likelihood that the company can't survive this high-spending, low-profit model for much longer? For context, their net loss was $1.9 billion after $1.8 billion in income, mostly from private investment.
2. Co-working spaces are a relatively recent trend trend (recent in the sense of becoming extremely popular). Is it not also a risk that we have entire buildings and millions of square feet dedicated to co-working spaces that may run 'out-of-style' in 5, 10, 15 years? A typical office building can be 'easily' reconfigured by the owner for open plan vs. closed plan, depending on trends/tenant needs, but this seems different to me, where WeWork is configuring spaces (and with significant upgrades/renovations, at that) for companies with sizes anywhere between 1-500+.
I don't know what the solution is here, but I am bringing up the problem because its slightly concerning, IMO. Quite obviously, WeWork is succeeding currently, especially in innovation-driven economies like Boston and NYC. I also appreciate the attention to detail they put into their workspaces. The founder was an architect before becoming the founder (the only (?) billionaire architect), so more attention is spent on design than most typical office buildings.
I know @Bancars will strike me down for this, but I think you'd get a major uplift for DTX simply by opening up Washington Street to slow-speed vehicles. I'm not sure exactly why, but the picture above drives that home to me.