Preparing for a Coming Winter Storm? WeWork Pivots to Minimize Risk for Itself

WeWork landlords in America are likely to learn: In a down market, they’re all going to be partners, voluntarily or otherwise.

By John E. McNellis, Principal at McNellis Partners, for The Registry:

With major announcements almost daily, WeWork is stealing so many headlines it’s annoying the president. The latest is its name-change to WeCompany, the old name being simply too restrictive for a company bent on global domination. Among its new divisions are WeLive, WeGrow and even WeBank is on the horizon.

Its other big news was related to SoftBank’s decision to pull back on the $16 billion dollar equity commitment to the company, reducing it to a mere $2 billion. Whether this was a belated reevaluation of the wee company’s prospects or a reflection of SoftBank’s own issues (its stock has declined 28 percent in value since October) is a matter of debate.

Lost among these headlines are a couple interesting notes about the company. First, the bonds it issued last spring with interest at 7.87% are now yielding 10.4%. Whatever SoftBank’s reason for re-trading its commitment, the bond market has consigned the company’s paper to the junk pile.

More interesting than its bond status, however, is what WeWork is doing today in Asia. Its pivot there might prove the company’s future, if not its salvation. WeWork has announced a series of joint ventures with major Chinese developers—most recently, Gemdale Properties, the giant state-owned real estate company—where, rather than simply leasing space from these developers (and taking 100% of the upside and assuming 100% of the risk), it is signing “participating leases” with them.

The details are sketchy, but the idea is simple: The building owner puts up the money for the tenant improvements, lowers WeWork’s base rent and then shares in the subleasing profits. In other words, WeWork is swapping profits for downside protection, not a bad idea in a rising market and a brilliant one in a falling market. And, according to WeWork, office rents are falling in all but two of its global markets.

Why would the Chinese do this? They’re smart guys. Why not insist upon the traditional landlord/tenant approach and force the tenant to take all of the risk?

One, they need WeWork far more than it needs them, since the company can go anywhere. The Chinese companies may be top-notch at “borrowing” technology and knocking off brands, but they suck at cool. And WeWork is cool; it has dazzlingly pulled off its brand. If co-working were just a matter of Beats, beanbag chairs and free beer, every frat in America would be banking money.

The other reason, back to them being smart guys, is that they must understand what WeWork landlords in America are likely to learn: In a down market, they’re all going to be partners, voluntarily or otherwise. Self-described big wave surfer Neumann has already announced he will ride the market down by rewriting the company’s unprofitable leases, lowering rents to profitability or abandoning the buildings.

The clever Chinese know that WeWork neither signs nor guarantees its own leases. Rather, for each lease it signs, it creates a single purpose entity (SPE) with limited capitalization; i.e. its leases carry almost no financial exposure to the parent company. This means that if a landlord refuses to sign a lease amendment giving away, say, 80% of her rent, Neumann can toss that particular SPE into bankruptcy and paddle off in search of the next big set. If we were on Gemdale’s board of directors, we might conclude that taking half of the upside isn’t such a bad move, since we’re going to be stuck with the losses anyway.

If WeWork truly wants to shelter itself from the coming winter storm — maybe not, they produce the biggest waves — the next step in its evolution from risk taker to guaranteed profitability could be the hotel model. Successful hotel companies create a strong brand and then, to over-simplify matters a bit, either sell franchises (the Motel 6 approach) or sign no-risk management contracts with owners of swanky hotel buildings (the Four Seasons approach).

Four Seasons and its competitors are paid a minimum fee regardless of the occupancy rate or gross income they produce for their owners. And they are paid big fees if all goes well. It isn’t impossible to lose money in the hotel management business, but it’s harder than in many other endeavors.

WeWork could do the same thing, it could become the Four Seasons of office buildings. It has the brand, it fills a need that it helped create and, as far as we can tell, its niche — short-term, micro-size office rentals in traditional long-term, big-space locations — is here to stay.

The point of this essay is not to bury WeWork, but to praise it for rationally pivoting its business in the face of economic climate change to minimize risk. Something we all might consider. By John E. McNellis, for The Registry.

Commercial real estate developer shares his insights on how to prepare for it. Read…  Winter is Coming to Commercial Real Estate

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  56 comments for “Preparing for a Coming Winter Storm? WeWork Pivots to Minimize Risk for Itself

  1. Lemko says:

    Is this a joke Wolf ? Wework business model borders a fraud for it’s investors, they have been de bunked many times… I don’t get why you would co-sign them ? The author is a shill with business interest in them, but your reputation is much more important…

    John Mcnellis, can you help me understand a Community Adjusted EDITBA ?

    • Dale says:

      The investors are going in with their eyes wide open. And we should be thankful — as with Uber and 90% of the other unicorns — that the investors are willing to subsidize us. We get cheaper rides, accommodations, and so on. The investors get to pretend they will get 10x profits (the typical markup of investment to valuation in VC), when in fact they will be extremely lucky to break even. When the deal doesn’t pay off, the VCs simply say– “hey its a power distribution, you knew that going in, it’s all there in Thiel’s book”. The investors are typically institutional and really don’t care as (a) its Other People’s Money anyway, and (b) they can retire comfortably by extending the pretense.

      Lots of people are saying we should tax the rich. The people saying that have no imagination. This entire unicorn investment ploy is, in effect, taxing the (clueless) rich to (in effect) pay the rest of us. We need more of that ‘investment’.

      Instead of complaining, sit back and enjoy.

    • Wolf Richter says:


      Be careful insulting my authors with nonsense just because they’re from the industry and know what they’re talking about. And try to understand commercial real estate. Read the article carefully, and you will see how WeWork is systematically shifting risk to landlords in ingenious ways. It’s the landlords that take the loss if something goes wrong, not WeWork. This is what this is all about. If you expect tough economic times, you want to reduce your own risk — that’s the last line of the article. But you have to read and understand the details. These people are smart.

      • Alex V says:

        If only smart equaled ethical or sustainable…

        • lisa says:

          wrong gameboard, wrong players, wrong script, wrong scrip

          still all of em are fun games? So long as you’re not left holding any pieces, all you can do is dance through the crowd

      • RepubAnon says:

        If all the subsidiaries are underfunded, someone’s going to try piercing the corporate veil…

      • Larry says:

        I see the strategy of the small entity that they can flush in the event of a down market, but it would seem that they might have to flush too many small entities all at once in something more than a mild downturn. That suggests to me that the losses WeWork might incur could still be substantial.

        Neuman has also become a self-dealing landlord himself, so he seems to have upped his personal exposure or WeWorks downside exposure if he doesn’t write down their leases.

        The fact that Neuman is using his position to rake in cash in the present at the cost of “growth” in the long term is a strong signal of what Neuman really thinks of WeWork’s future potential.

  2. secant says:

    Today in Future News…WeCompany changes name to WeBroke, resulting in WeBank being purchased by BrokeBank of America for the small sum of $1 trillion dollars. Next week… House Judiciary Committee subcommittee parades Roger Goodwell on TV due to NFL antitrust “unfair call.” Next month, President prays for further global warming to counter polar vortex (broken thermostat) weather events.

    Full GDP ahead Captain Chaos! Globalization is unsinkable…

    • timbers says:

      And no doubt the law firm of WeBroke is Dewey, Cheetham & Howe, which is the same firm Car Talk uses.

      • sierra7 says:

        LOL! You “guys” brought some chuckles to my afternoon!!
        In the end, the firm “WeSkrew everybody” picks up the pieces!!!! (and $$)
        I did learn about another facet of the “fast” business economy…never heard of WeWork before and did some reading on the internet half way thru this article.
        Thx Wolf for reaching out to other writers……

    • Paulo says:

      Hilarious comment, secant.

      As I read this article I had three thoughts. 1) Never heard of these guys. 2) Thank God I live where I do so I never have to hear or smell these guys coming. 3) My God, another example of a Company making money that actually doesn’t build anything, create anything, or fulfill a necessary service other than rip someone off and make money off a process, in this case commercial rentals. I have a nephew like that. He is a psychopath who leaves investors holding the bag with every little venture. We are also wary about picking up ticks in the woods, and have screens up during mosquito season. These bloodsuckers need to be in jail.

      The trendy little name is oh just so ‘social media’. We Work sounds like a non-profit do-good operation. Insteaad, (We Work for us, not you).

      • Ethan in NoVA says:

        My prior employer was a customer in markets where they only had a handful of employees or sales agents. They could use spaces in the network to have meetings and what not.

        Another friend used them to rent space for their startup, and said while expensive it did remove a chunk of hassle and gave them flexibility, perhaps to avoid a long term lease.

        There are many other co-working space companies but there is likely a benefit to a national chain with a high quality level for larger companies that want access to meeting space in lots of markets.

        • Arizona Slim says:

          I’m writing this comment from a coworking space in Tucson. Matter of fact, it’s the only surviving coworking space in this city.

          While it’s easy to start one of these things, it takes a boatload of sales and marketing to keep it going. Reason: Tremendous turnover. People are coming and going from this space all the time.

          I don’t think that WeWork’s top execs have realized this yet.

  3. Tang says:

    Yes those in the world of unicorns, startups etc are very very smart people. If not how do they attract investors to pour money in? How would retail investors want to buy their shares on IPOs? How would even gov. officials give them grants for such endeavours. They are so smart that they sleep, eat, walk, and talk their ideas as if it is 100% success. Even governments all over allow Ofo and Obike bicycles littered all over their streets and roads. Try having your bicycles parked in the bus stops. What happoens now? Who is responsible for stupidity? No. People are always smart. Watch the youtube videos on the lady CEO preaching about blockchainn in 2016. Talks about blockchain ruling the world. Wonder where is this smart lady now.

    • Wolf Richter says:


      There’s the smart money, and then there’s the dumb money. Who made money and who lost money? Who comes out ahead and who ends up holding the bag? That’s what you need to ask yourself.

      If you buy an IPO and shares then collapse, you’re the dumb money. If you lend WeWork money by buying its bond that is secured by fluff, and the bond then defaults, you’re the dumb money. If you lease a building to a special purpose corporation that WeWork has set up for that building, and that special purpose entity breaks the lease and files for bankruptcy without even denting WeWork, leaving you high and dry, then you’re the dumb money.

      • PseudoRiskManagement says:

        Difference being that there runs the very real risk that the CCP officers in the leasing company passes their claims up the chain against the SPV, and decides to go after the parent company all over the world on many levels… there’s risk… and there’s risk™️, and WeTrash seems to be mitigating the latter here.

      • Lisa says:

        The real truth, and nothing but the truth….

  4. Yaun says:

    Something does not match up. I can’t imagine that it is legally that easy to shift risk into a SPE that is obligated to share all its profits and then let it slide into bankruptcy if things go south. If it would be that easy everybody would outsource risk and our business system would look a lot more chaotic. Obviously there is a lot of regulation around this, and I’d be thankful if an expert could explain what exactly WeWork is doing different to dodge this?

    • chillbro says:

      You don’t necessarily shift the risk. You are shifting the burden of proof on the otherside. Cost of litigation will deter most but eventually someone will have enough money on the line to see this through. In my opinion, the courts will see through this crap and rule accordingly. By that time, this company will be a gaint though.

      • IdahoPotato says:

        This is standard operating procedure in real estate.

        “I figured it was the banks’ problem, not mine. What the hell did I care? I actually told one bank, ‘I told you you shouldn’t have loaned me that money’.” – POTUS in 2008.

        Same theme on the macro level. On the debt crisis and budget deficits:

        “I won’t be here when it blows up” – POTUS in 2018.

        • Unamused says:


          When collective self-extinction enjoys such remarkable approval ratings, it becomes clear why global habitability has become such a non-issue. But at least I’m over those bad dreams where I was somehow desperately unable to get off the planet. Occupational hazard, I suppose.

          You’d think there’d be a Game of Thrones quote appropriate to the present human condition, but none remotely seems sufficiently dire. And that said, won’t it be ironic when series concludes with the Night King winning?

          Time to get busy. Fa’a!

        • Unamused says:

          =>“I won’t be here when it blows up”

      • lisa says:

        The courts have been filled by people that will SUPPORT this crap and rule accordingly. MORE Money is being made that way, especially for the people who are engaged in making sure they can be totally non-responsible as all of the BURDEN of PROOF is ALREADY on the other side. That’s the way it is and the courts love it. The courts are eating it up. More and more are guaranteed positions in the courts to specifically SUPPORT this crap and rule accordingly.

    • Wolf Richter says:

      This is standard operating procedure. Every landlord knows this. You buy an apartment building and put it into a dedicated LLC (in the US). An LLC is a corporation. It has nothing but the building and the building’s debts and obligations in it. Any profits are passed through to you. If the building isn’t worth keeping and worth a lot less than the debts and obligations, and if rents don’t work out to pay for it, you let the bank and other creditors have the building and the LLC. And you walk away. If you set it up right and don’t personally guarantee anything, that’s all they get. And you’re off the hook.

      • David in Texas says:

        What this tells me is that the landlords leasing to We Work are desperate. Everyone involved in commercial real estate knows the dedicated LLC game. If a landlord has any bargaining power at all, they will insist on a corporate level guarantee so that if the single-asset LLC defaults, they can recover from the parent.

        The fact that these landlords have accepted such one-sided terms means that they are sitting on lots of empty space.

        • AnonymousPoster says:

          Yes. One consequence of China’s building boom in particular is that many many cities are chock full of office space that is shiny, new, and empty. For them any tenancy is better than none at all. And I suspect for many of them the risk such as there is has also already been passed off to someone else the way WeWork is passing it off to them.

        • Anonymous says:

          I work in Commercial Real Estate management and am a broker, and this is exactly the case.

          WeWork came into the market strong when the the CRE market was trying to work its way out of the recession – differing years in depending on the markets, but I think 2012 – 2015 was a period of that real initial growth, and in really growing markets they have then expanded multiple times since then through current day.

          There was vacancy, and brokers pitched WeWork as the new trendy solution that would fill space in large assets and give it a new trend and model that would speak to the younger generation and work well with existing tenants in place.

          Fast forward to now and many in the CRE market are realizing that their model will contract quickly in a downturn because they rely on subscribers to fill spaces – or the WeWork locations are supplemental locations for corporate users that opened them up in growth times and may shutter in down times.

          We really have never recovered from the 08/09 recession. There has just been a sugar high of money running around and that void will empty again as the money drains out of the system. Smart companies in the downturn renegotiated their leases to better rates, used Landlord TI dollars to develop new and more efficient / flexible space, and CONTRACTED their footprints in buildings on a Square Footage basis.

          Commercial real estate valuations will be affected again in this downturn, and those Landlords that are over-leveraged will default on their properties or be forced to fire-sale or go under. Some of these real estate assets are held by REIT’s and are publicly traded companies, and others are held in massive annuity funds or retirement funds. In the 08/09 downturn a big problem for a lot of these funds / publicly traded funds was that when the stock market crashed, these funds were REQUIRED to sell their CRE assets as the inopportune time when their value was also down, because the proportionate share of the holdings in the fund was out of whack with what was required in the governing documents (think stock value drops and stock holdings are now 20% instead of 25%, and now Commercial Real Estate is 15% instead of 10%). That flooded the market with assets for sale and no buyers and it was chaos. And Assets were not able to sell for more than the debt that they were leveraged for (new construction developments or redevelopments). This could all easily reoccur in a coming recession.

          Its well documented the amount of large CRE loans and Mezzanine debt that is coming due in 2019, 2020, and 2021 (and beyond) – Wolf can you do an article on that sometime? I would be fascinated to see who is the most exposed this time around and how well positioned they are for the downside – and I have not found that information in too many places.

        • Wolf Richter says:


          Since you’re in CRE in Texas, here is something that amazes me. Houston’s office sector is in terrible shape. Average vacancy rate of over 23% (JLL), higher than it was during the oil bust. In other words, new construction has come on the market. And there haven’t been enough takers.

          Vacancy ranges from 9% in Bellaire and Medical Center to 52% in Greenspoint/North Belt. In the crucial CBD, it’s a bone-chilling 22%.

          But here’s the thing: average asking rent is $31.30 (does not include incentives), which is higher than it was back during the oil bust. In most sub-markets, there is a large oversupply, but asking rents are not coming down. I understand why landlords don’t want to lower their asking rents aggressively. But how long can they keep this up?

        • Arizona Slim says:

          Just took a little walk through Downtown Tucson. Plenty of empty storefronts, and I don’t think I saw an office building that wasn’t advertising available space.

      • lisa says:

        AND, add in some MBS owned by private LLC’s, funded by 401K’s etc., a bit of churning by HFT, own the exchanges, and you’re really off the hook, big time. AND get to keep the properties and spin them again, and again.

        • Anonymous says:

          Wolf –

          I’m CRE in the PNW – Seattle – actually – not sure where you got Texas. But I know Texas / Houston CRE pretty well – it lives and dies based on the oil sector, so the health of that market is purely because of the declining oil market globally.

          I suspect rents will come down as interest rates go up and debt is restructured, or as the oil bust is prolonged.

    • LessonIsNeverTry says:

      I’m surprised people are surprised at this. Has no one here set up an LLC before? This works quite well in the US for a couple of reasons:
      1. High trust society
      2. Reasonable bankruptcy laws
      3. Just enough piercing of corporate veil to protect against fraud
      4. Have you ever tried to get a large small business loan?

      • Ethan in NoVA says:

        It’s easy to set up the LLC but often not so easy to get someone to loan you money or make other agreements without personal guarantee.

  5. Iamafan says:

    Yes sometimes cooperation is the best capital.
    It takes a lot of courage to say this in difficult times. Just like he said:

    The point of this essay, dear reader, is not to bury WeWork, but to praise it for rationally pivoting its business in the face of economic climate change to minimize risk. Something we all might consider.

  6. safe as milk says:

    i’d like to comment on the wework model from the tenant perspective. i spent about 15 years renting small commercial spaces in manhattan. my wife has done it even longer, now in queens. i never understood why any entrepreneur would rent from these operations. in my experience, the charge double or triple the prices you would pay for an equivalent space that you subleased through a craigslist ad. the only advantage is the plug and play aspect of it. i usually just subleased something empty and with a few trips to ikea and home depot, i would build a waiting area, etc.

    • kitten lopez says:

      safe as milk..

      i could be totally talking out of my behind because here in SF i’m confused about this wework model, too.

      being HERE during this second tech boom, i and others, are speechless about the amount of OBVIOUS b.s. that is new and accepted in all aspects of work now. or rather LIFE. from dating to government bureaucracy. i think it’s also endemic in the internet of things that it’s all about surface appearance to “support” all these financial projections for the future.

      i don’t know but it SEEMS like american entrepreneurship is no longer about setting up your own funky little shop to support you and your kin over time, but it’s now all about the flash of an initial idea and then cashing out.

      there’s supposed to be some toothless law that was supposed to keep the empty stores from staying that way and causing high end “blight”, but that law’s not working and SUCCESSFUL businesses are being run out of town when the rent is due and these places are leaving empty corners and corridors just like in manhattan now.

      i’m confused that EVERYTHING is a lie. the city is no longer “convenient” and you can’t get simple things at brick n’ mortar ANYTHING anymore and receiving anything via all this crappy shipping now with gig deliverers…. things arrive broken, late at night, and thus often stolen now.

      but aside from the crazy commercial real estate rents, regulation is also crippling. that’s why i’m planning my business around the out-call prostitution model complete with my own driver/rep to collect the cash and get me safely home.

      i’m not kidding. i’m an art chick and now that everything including masculinity and parks have been gentrified, i have to find the “underground” in other ways.

      so why don’t the commercial landlords just do similar things themselves instead of via wework???

      it was like when 5 out of the 6 apartments in our building were being airbnb’d out, i ASSUMED the management company HAD to be in on it because they were always over fixing stopped up toilets and overflowing sinks from these strangers. but they weren’t in on it at all partially because of greed but mostly because it never occurred to them.

      i don’t know nada…

      • Howard Fritz says:

        I’m with you kitten lopez this business model sounds like it borders on fraud, also can litigation simply pierce the veil, isn’t insufficient capitalization a form of fraud?

      • lisa says:

        You have a pretty clearly focused picture of reality on at least a few levels.

        • lisa says:

          It’s not really a lie. It’s short-term staging. Short-term setups. Get in play the specific market for a while, and get out. Now, that used to be called scamming, today, that is the real market top to bottom. I love the lines by some of the top writers that include at the end of their financial piece: it’s good til it isn’t. or it works til it doesn’t. That is our economy, today. Now, of course, I think it’s all because the present internet platforms are based on theft. And everybody in the world is supporting them. The trick is to NOT support the lies. The little people scrambling for so-called “gig” work, which is really fly-by-night short-term piece-work performed at temporary work-sites with no permanent accountability on any level. We are seeing the bazaar booths of ancient Bedouin being established from the back-end. Maybe eventually, there might be some local stability for buy-outs by the “workers”, but historically that never happens. I think we’ll be dealing with combatting manufactured plagues and disease long before the other scenario even enters the temporary staging platforms. It’s a cut-throat business model in no uncertain terms. The real play is “You VS Time”. I’m old and bowing out of the picture, hopefully with a graceful exit.

    • Anonymous says:

      I believe the trend for WeWork is symptomatic of the service based economy in the US. Most people want their Starbucks coffee in two minutes, Amazon groceries delivered to their home, and when an entrepreneur they can pay one fee to setup shop and work without thinking about the rest. Its also helpful to have good times on the street where these amenities are purchased without thinking about the cost / affect to your bottom line. Everyone will have some belt tightening to do in the down times. In my experience, the people who are really making money and developing savings are the ones who focus on the pennies and don’t get over-leveraged. Or the ones who just kill it and don’t need to worry about costs. But that doesn’t seem to be the people working at WeWork…

      • Lisa says:

        You sure seem right to me. Especially your remarks on CRE- and repeat of past patterns in any next recessionary cycle. Just today in my following of the Seattle Market, the Seattle Times had an article about the big money interests acknowledging mid-market housing demand, but the same monied interests won’t put any money where it is needed. There is a reason for urban planning, environmental impact studies etc. and there is a reason for civil government. If nobody wants to acknowledge that need, everyone plays and pays to short-term dictates. The people working for WeWork are scrambling for short-term survival with no real financial support for any social longevity in reasonable communities. Reality hasn’t hit them in the face yet.

        • kitten lopez says:

          wow, Lisa… i’m going to answer you in a fresh post below so it won’t be a 1″ wide column that runs 3 feet…

  7. Morty says:

    I have had the priviledge of being a key player in the earliest stages of a start up with the stated goal of becoming a half billion+++ company. I was actually somewhat amusing in a gruesome way, to watch the stages – Delusional Founder, falls in love with own “Idea” – Sells idea to family and friends with money to spare. – continues with Seed and First round financing (Lots of Laugh a minute investor and board meetings in between) Investors of varying intelligence and sophistication, everyone started drinking the Cool Aid!!! – The delusions are self reinforcing as more and more time and money disappear down the Rabbit Hole. In all those meetings, with all those smart folks, almost no one ever asked the basic, obvious question – How many Paying Users are there? What is the growth rate? What is the persistence rate? What is the viral recommend rate? Is anyone using the service and using the profit components built in in order to enhance revenue and profits? My point is – Delusions often rule the day, and smart money, is as easily pulled into the “Delusion of Crowds” as any other. Indeed, many of the medium and large players are playing with “other people’s money” – I have seen it in action, human nature is really incredible – Thank you to Wolf, for the ringside Seats!!
    Or as Douglas Adams so eloquently put it “So long, and thanks for all the Fish!!”

    • IdahoPotato says:


    • BubbleBoy77 says:

      I interviewed a guy who worked ~3 intense years for a start up in the dot-com boom/aftermath. When I asked him what happened, he said “what we thought was a 500 million dollar market was more like a 5 million dollar market”. He worked a lot of unpaid hours but said overall it was a good experience where he learned a lot.

      • Arizona Slim says:

        I sincerely hope that one of the lessons he learned was:

        Never Work for Free

    • lisa says:

      Pretty accurate. No overall basic PROJECT. No pre-cost estimates. No real tangible goal. A lot of players know and understand that routine, and will support it, so long as it ain’t affecting their money at all. They also know how to keep their mouths shut. “OPM” is the only game in town. But, it’s beyond that now. Now it’s really every aspect of “OP”.

    • Anonymous says:

      this same thing is applicable to Amazon and other large conglomerates. they have been turning all their profits back into growth and are carrying lots of overhead for teams that are not making money or are undercutting other business models to be market disruptors. As the economy contracts, so will their profits and they will tighten belts, and the workforce will need to contract as well.

  8. Morty says:

    By the way – Paying Users – ZERO – Interest from the front line user group target, once the realize it is not “Freemium”? ZERO. But don’t worry, build it and they will come!! – Anyone caught, working for the company, who asks these basic business, success, and survival questions, is touching the company “Third Rail” ZAAAAAAAP – …”And he’s gooooone…

    • Tom Jones says:


      I think you’re onto it with the “third rail” comment. Self-selective system.

      Also, to Wolf.

      I enjoy the comments as much and sometimes more than the articles themselves. It’s a bit of genius to write articles of the caliber which elicit such comments that they, the comments themselves, account for at least half the value of the website content. Free writers!…and notably , some are very knowledgeable, coherently written comments.

      • KJM says:

        Tom, I agree whole heartedly with your comment to Wolf about the comments; they often explain some of the article or add to the topic of it in ways that are almost always more interesting to me than the article itself.

  9. Huh? says:


  10. lisa says:

    Anybody remember that doctor down in Florida that had the same model for his condos? It took ages, but the bankruptcy finally got through the courts after about 20 years. The “owner” sure took the big loss over that time…

  11. kitten lopez says:


    your posts energized me. i have an innocent love note to write but i want to answer you because i’m all about blowing dandelion seeds of a rebellion growing silently steadily like beautiful weeds….

    first i must answer how i assume Petunia would, if she were here. she’s probably off in her rhinestone flip flops doing her nails and is still 10 steps ahead of the world.

    she’d say poor folks are better at money than anyone else because THEY HAVE TO BE; and i add that i “get it” (the Big Con) because I HAVE TO.

    points you said that caught me ablaze:

    “everyone plays and pays to short-term dictates. The people working for WeWork are scrambling for short-term survival with no real financial support for any social longevity in reasonable communities.”

    and from your response farther above:

    “Now, of course, I think it’s all because the present internet platforms are based on theft. And everybody in the world is supporting them. The trick is to NOT support the lies. The little people scrambling for so-called ‘gig’ work, which is really fly-by-night short-term piece-work performed at temporary work-sites with no permanent accountability on any level. We are seeing the bazaar booths of ancient Bedouin being established from the back-end.”

    —this is why “art” can no longer be content to merely match one’s sofa. “art” has to be a whole movement against this ish and come up with something epic gigantic and rebellious you cannot make in china, conceive in china, eventually offshore to china.

    i have to use my magic powers of seduction and AGGRESSION in many areas to make REALITY and HUMANITY and INDIVIDUALITY look so good, you wouldn’t dare hunch your head over a tiny addictive device when the world we’ve created and INVITE OTHERS into is infinitely more interesting than what a bunch of evil trolls have created to keep you twitchy and hunched and neutered tagged etcetera…

    i have my work cut out for me.

    even though all we see are sheep now that all the interesting people have died from risk despair disease or TIME, i know i KNOW that just because artists and freaks have been evicted from centralized areas, we cannot gig economy ourselves into subservience or silence.

    i know others are primed in their DNA to be forever creative and come up with some way of surviving on our own terms with whatever “temporary autonomous zones” we may have to create since the rentier class INSISTS on keeping absolutely EVERYTHING to themselves.

    we must start our OWN thing, yes… i am struggling to go BACKWARDS to a time before the inter-fxcking-net of things. where no one or anything is special because there’s another knock off like it.

    i’ve had some young folks in their 20s ask me to be their mary poppins but their short term thinking and their dreams of permanent and constant social media acceptance are my worst nightmare as i come from a world where i’m taught to immediately distrust anyone’s popularity, INCLUDING AND ESPECIALLY MY OWN.

    that’s about as anti-american as it gets where yes… now it’s all a short money con game and that perfect strangers think you’re a vaguely “good” person.

    why be beholden to any system that will eviscerate you for one wrong utterance or touching someone’s back in a world where being nice in an elevator is considered windowless-van-creepy?

    artists rebels … the non-sheep people… screw everyone else; it’s time to make our own world.

    this is why i’m already ramping up my workout and getting ready to meet Wolf and other wolfies because i know it’s gonna be even better than going to the stale smoke piss and beer dive bar and talking about how being like Basquiat would change the world. ha. that was before he committed suicide. heroin is suicide to me. happy people are not addicts.

    happy people can put the magic phones DOWN.

    they’re mad rare around here.

    but Lisa… the fun IS about to begin. i can feel it. i’m part of the elders tasked with restarting the underground. i was told this before i went into 7 years of shock awe and despair about things.

    i think there are stages of acceptance about the global state we’re in like the stages of accepting bargaining arguing with Death.

    what makes Wolf’s comments section so damn good is that you have people who’re well ahead of gen pop and can show you what each stage is like.

    Petunia and Unamused seem to be at the end of the spectrum but i sometimes think the end looks more like “sublime acceptance.”

    what a couple of formerly famous journalists already said about losing their lofty positions and becoming delivery or uber drivers in this gig economy.

    okay. enough internet. i’m off to write a paper note to a new man at the gym who’s dumbfounded that i live without a magic phone. one note will show him what no text can ever hope to convey…. lipstick perfume paper and the feeling of getting a valentine in kindergarten.

    that ish never EVER gets old.

    that’s my rebellion.

    see you at the Wolf Pack Meeting.

    (Wolf, can’t you see i’m LIVING for this like my annual training to dance at carnaval til i crawl on gravelly knees home)


    • Wolf Richter says:

      To everyone: what Kitten Lopez is referring to in the last few lines is something I have told her I’m thinking about: a meetup in some not-too-noisy San Francisco bar for Bay Area readers who are interested in getting together over some liquidity. I will post something on this shortly to get a feel for how many people might be interested in something like this.

  12. Not me says:

    WeWork sums up the higher education system, perhaps next in the barrel.

    Colleges steal your time and experience in return for cash and deliver no promise to get the student any future career or employment.

    In the case of most B schools, they sell the student’s time in the form of class assignments to corporate sponsors that need extensive market and product research.

    Better for a student instead of college, to work for a startup and get OJT, and maybe even get paid and not sink cash/debt into tuition.

    WeWork’s marketplace is not CRE, but college/vocational education.

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