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WeWork's CEO Makes Millions as Landlord To WeWork (wsj.com)

Posted by msmash on from the how-about-that dept.

An anonymous reader shares a report: For more than two months after employees at IBM moved into a Manhattan building managed by office space giant WeWork, frequent elevator problems forced workers to climb the stairs of the 11-story building and prompted complaints to the company. One of the landlords behind the building was no ordinary owner: It was Adam Neumann, WeWork's chief executive, who leased the property to WeWork after buying it [Editor's note: the link may be paywalled; alternative source], according to people familiar with the situation.

Mr. Neumann has made millions of dollars by leasing multiple properties in which he has an ownership stake back to WeWork, one of the country's most valuable startups. Multiple investors of the privately held company said the arrangement concerned them as a potential conflict of interest in which the CEO could benefit on rents or other terms with the company. [...] WeWork, which was recently valued at $47 billion by investor SoftBank, signs long-term leases for office space with landlords, then subleases the space on a short-term basis to companies. Mr. Neumann, the 39-year-old executive who founded WeWork in 2010, is WeWork's largest individual shareholder and has voting control over the company.

7 of 131 comments (clear)

  1. Oldest trick in the book by JaredOfEuropa · · Score: 5, Insightful

    That’s how you siphon off money from startups, struggling companies or even foundations into your own pocket.

    --
    If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    1. Re: Oldest trick in the book by FuzzyDaddy2 · · Score: 4, Insightful

      It is not an unusual arrangement, I know a small business owner who leases his own space to himself. What doesnâ(TM)t make sense is why anyone would agree to invest in WeWork with this sort of arrangement.

    2. Re:Oldest trick in the book by Gilgaron · · Score: 4, Insightful

      Sears may well have died anyway, but this sort of thing was also used to drain it of money as well.

    3. Re: Oldest trick in the book by Darinbob · · Score: 4, Insightful

      Small business maybe. But startup as a term refers to a particular type of new small business. Funded by venture capitalists based on flimsy proposals, business plans that focus on getting bought out soon rather than on long term profitability, workers given valueless equity to offset their lower than average pay, etc.

      Most small businesses plan to stay in business, yet the majority of startups fail without any analysis by the investors of why they failed or how to improve in the future.

  2. Predicting a great future to this young man! by 140Mandak262Jamuna · · Score: 3, Insightful
    New York real estate? Check

    Self dealing and raiding public company to fill private coffers? Check

    Corrupt? Check

    I see a future presidential candidate from a major political party.

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  3. What a wasted opportunity by Anonymous Coward · · Score: 4, Insightful

    Money that could be used to grow the start-up to make it thrive and prosper is just lining the pockets of an already wealthy individual. Can I just say, we don't hate on the rich enough. At least not this type of rich. They're the ones killing jobs, not those pesky immigrants or regulations.

  4. Re:Wealth is good by gDLL · · Score: 1, Insightful

    You may of course be making fun of Jesus, but seems you have noticed that there might be some corelation (achtung obligatory corelation/causation) between jesus followers and success in life. Just sayin.