WeWork CEO John Santora Charts Expansion With Vast Coworking Group Pact
In the top job since June, Santora says he wants the coworking giant to stay ahead of companies' plans for growth
By Mark Hallum October 15, 2024 8:00 am
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WeWork (WE) is often credited for blazing a trail in the coworking industry, and as it emerges from Chapter 11 it is taking a page from those it influenced.
The company, co-founded by Adam Neumann and Miguel McKelvey, had seen much better days before the pandemic, growing to a size that would prove to be unwieldy. But now that WeWork has shed hundreds of leases and debt that was dragging it down, CEO John Santora is getting the company back out there with a new partnership, Commercial Observer has learned.
WeWork may not be physically putting locations in new markets, but it is partnering with Vast Coworking Group to make its booking software available in Vast’s franchises across the U.S. and Canada. The partnership will allow WeWork members to book space in one of Vast’s 75 locations without actually being a Vast member.
“The way we look at it is that we need to be where our members need us to be, right? So we’re in all the big metropolitan cities around the world with our 500-plus locations,” Santora told CO. “But sometimes some of these smaller suburban markets are key. … As people continue to change how they work and where they work, this provides access [to workspace] closer to home, but yet they can still be in a corporate office.”
Affiliate programs with third-party coworking spaces might be its playbook for now, with Santora explaining that WeWork is going to continue to focus on strengthening its position in the markets it is in.
The now-private WeWork (which had a long, winding road to going public) is looking for partnership agreements where revenue is shared with landlords, rather than lease arrangements that expose it to high rents regardless of how much money a location earns, according to Santora. (Something WeWork tried, and failed, to focus on under Neumann’s leadership.)
“There’s growth in partnerships, there’s growth in franchises, but really the driver continues to be great space in the right markets,” Santora said. “We’ll also look at times at doing some management agreements with landlords. We think there’s a great opportunity there to help them handle their amenity space, but also to fill that last 10 or 15 percent of the building that all landlords struggle on.”
Ultimately, the partnership helps WeWork take advantage of a projected 72 percent of companies that are planning expansions in the next two years, according to WeWork.
The Vast partnership is one of the first moves Santora — a longtime Cushman & Wakefield (CWK) veteran — has made since he took the helm of the coworking giant in June. In July, WeWork announced it would turn its space on the 14th floor of 575 Lexington Avenue into a tenant lounge available to not just WeWork members, but to all workers in the building, seemingly a first for WeWork.
As Vast President Jason Anderson built his company with brands like Venture X, Office Evolution and Intelligent Office, he envisioned it becoming “the Marriott of coworking” and approached WeWork with a potential partnership during its times of distress.
Anderson said the partnership will at some point grant Vast clients access to WeWork spaces. He said similar partnerships can be struck with other space providers, likening to the Oneworld airline alliance that provides a premium membership program to frequent travelers.
Mark Hallum can be reached at mhallum@commercialobserver.com.
