The interest in securing the massive financing could signify changes within WeWork, which could amount to a new structure that may look more like a public company, the Times noted.
The credit facility is an indication that WeWork is doing well and capitalizing on market conditions, Ashkan Zandieh, the founder of real estate advisory firm RE:Tech told Commercial Observer. However, he said that it is not necessarily a sign that WeWork will go public.
“When you start getting into the debt realms with a pending interest rate hike, that’s what gets pretty interesting. It’s a straight real estate play,” Mr. Zandieh said. “It’s a really interesting dynamic. In real estate, if you can refinance it now in this market, why not take the opportunity to do so?”
WeWork—which was valued at $10 billion in June at the start of a series E fundraising round—is expected to close the facility this week. Additional capital would also allow the growing firm to expand its real estate footprint and offer more services to its clients, which WeWork calls “members.”
Word of the credit facility follows the news that Todd Bassen is leaving his position as co-head of real estate at the firm this summer after three months on the job. The job just “wasn’t what he expected it to be,” a source told CO in September.
Still, WeWork has undoubtedly become a major player in the New York office market since its beginnings in 2008, and has raised $1 billion in funding over the past five years.
The firm, which is based in New York and leases over 1 million square feet in the city, has national locations in major U.S. markets, as well as several international sites in Amsterdam, London and Tel Aviv, Israel.
“As soon as we realized early on what the potential was for us as a company and a brand, and really as an empowerment mechanism for other people—we knew what we were going to become and what we are working on becoming,” WeWork Co-founder Miguel McKelvey told CO this March. At the time, the firm was valued at $5 billion.
“We still have a long way to go before we’re going to get there, trying to figure out when that time will come, when we’ll feel like we’ve made it,” Mr. McKelvey said.
A spokeswoman for WeWork declined to comment.
Additional reporting provided by Terence Cullen.