CWK - WeWork and Cushman & Wakefield Considering a $150 million Partnership
According to reports from The Wall Street Journal, leading commercial real estate company Cushman & Wakefield PLC ( NYSE: CWK ) and shared office space firm WeWork is discussing a possible $150 million partnership to help them navigate the new age of flexible work environments and remote working.
Cushman to spend $150 million in merger deal with WeWork
Cushman will spend $150 million as part of the deal in a potential merger between WeWork and a public company later this year. WeWork’s endeavor to rebuild its financial sheet following the high-profile failure of its planned initial public offering in late 2019 will come to a close with this merger, which is projected to value the company at $9 billion including debt.
The contract with Cushman comes as office building owners and renters struggle to plan for the return of tens of millions of employees to suburban and downtown office parks after working from home for the past 18 months. Many people expected Labor Day to be a watershed moment. However, concerns regarding immunization rates and Covid-19 virus strains have led many corporations to postpone their plans.
According to the Wall Street Journal, the executives of the companies feel that business combination will help them provide office building tenants and landlords necessary help in redefining the office-space sector while addressing the growing pressure from employees for flexible working provisions. Some of the largest corporations in the US have announced that they will allow employees to continue working remotely.
Cushman & Wakefield, which had $4.17 billion in revenue in the 1H 2021 with operations in 60 countries, does many tenant space management. WeWork’s app, tech, reputation for trendy workspaces, and other benefits will help give the collaboration a competitive edge, according to Cushman executives.
Cushman and WeWork to help landlords attract clients
Nathaniel Robinson, the chief investment officer of Cushman, said:
“As employers are working to get their employees back to the office, they need to say not just that it’s a safe space but here’s what you’re getting out of it. Why is it worth making that commute again to get back to the office?”
Investors and landlords are looking for new ways of attracting tenants in what will be a tough office-leasing market in decades. Already vacancy rates are up in mots area as tenants shift to flexible workspaces. WeWork CEO Sandeep Mathrani said:
“Covid-19 has fundamentally changed the way people work.”
Following WeWork’s botched IPO, new management was brought, which renegotiated leases, closed locations, and reduced jobs.
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