Matt Levine’s most recent Money Stuff article is classic Matt Levine. It is both entertaining and informative. This one is on WeWork – the coworking startup that has committed to 14 million square feet of office space around the world and will have $18 billion in rent payments due over the next decade.
Here is an excerpt:
WeWork Cos. is a real-estate company with a couple of innovative twists on the model. First, rather than owning its buildings, it rents them: It leases office space from regular real-estate companies, adds … beer? … or whatever, and then subleases the space to tenants at higher rates. And second, rather than being valued like a real-estate company, it gets valued like a hot tech startup — “the sharing economy,” ping-pong tables, etc. — so it can raise gobs of money from SoftBank Group Corp. at a $20 billion valuation without ever getting particularly close to profitability. And look at all these words:
“Indeed, to assess WeWork by conventional metrics is to miss the point, according to [Chief Executive Officer Adam] Neumann. WeWork isn’t really a real estate company. It’s a state of consciousness, he argues, a generation of interconnected emotionally intelligent entrepreneurs.”
Really, what sort of multiple would you put on a state of consciousness?
Yesterday it was announced that Tim Hortons would be moving its corporate headquarters from Oakville, Ontario to downtown Toronto.
They’ll be taking 6,000 square meters of space in the PATH-connected Exchange Tower and moving all 400 employees by the end of this year.
I’m more of a Starbucks coffee drinker, but I am interested in this move. Here’s what their president, Alex Macedo, had to say about it (quote from the Financial Post):
“Consumer trends are changing very fast. We want to remain an innovative company,” he says. “We want to be able to react to guest changing behaviours so we thought being positioned in Toronto would allow us to do that.”
