One of WeWork’s fastest-growing businesses has nothing to do with its start as a coworking space for people looking to get fledgling companies off the ground.
About one-third of WeWork’s members now work for big companies such as Microsoft, BlackRock, Salesforce, and Adidas. WeWork started targeting these companies just over two years ago, in a push led by Michael Gross, the company’s vice chairman.
“From an employer standpoint, WeWork is a better experience for their employees and meaningfully cheaper on a per-employee basis” than traditional office space, Artie Minson, WeWork’s copresident and chief financial officer, told Business Insider. “The CEOs like us and the CFOs like us.”
A survey released on Monday — WeWork’s first “global impact report” — showed some of the benefits for these major companies, among other statistics. About half the enterprise members said WeWork has helped them enter new markets, and more than three-quarters said it has helped them attract and retain talent.
The report came the same day as WeWork filed its draft registration to go public. WeWork rebranded as The We Co. in January in an effort to expand beyond commercial office rentals. SoftBank, the Japanese conglomerate, has invested some $10 billion in The We Co., most recently in January, at a valuation said to be about $47 billion.
Enterprise is one of the biggest growth areas for the company. Corporate memberships jumped from 43,000 in the fourth quarter of 2017 to 119,000 in the last quarter of 2018, according to a financial presentation seen by Business Insider. WeWork leases to about one-third of Fortune 500 companies, and Minson said he “certainly” expects both the number of overall memberships and the company’s client roster of Fortune 500 groups to grow.
“We’re really just getting started on enterprise,” he said. “We’re now opening buildings at a much higher percentage filled than we used to, and that’s because you’re not building on spec[ulation]; you’re building on you know what people want and when they want it.”
He said companies like that they can sign shorter-term leases than the 10- to 15-year contracts landlords typically require, which helps with both corporate flexibility and new accounting standards that change how tenants allocate leases on their balance sheets.
Sign up here for our weekly newsletter Wall Street Insider, a behind-the-scenes look at the stories dominating banking, business, and big deals.
One enterprise member is Liberty Mutual, which put its innovation-lab arm in a Boston WeWork in 2015, Adam L’Italien, the vice president of global consumer-markets innovation, said. In 2017, the growing group moved to a bigger WeWork space across the street from Liberty Mutual’s headquarters, expanding its capacity from 40 people to 150.
Now the lab can host colleagues from headquarters for short- and long-term work, as well as global rotators. L’Italien said WeWork’s programming differentiates the landlord from others because Liberty Mutual employees can network, attend relevant trainings, and even take a Pilates class in the same building.
“I do feel strongly about the value of being immersed in this environment where you have all these folks and companies working alongside each other,” L’Italien said. “That collaboration and borderless business is very much of huge value.”
Liberty Mutual is in the process of launching a similar innovation lab in South America, which will also be housed in a WeWork.