Is WeWork in trouble because they're not charging their customers enough/they paid too much to rent or are they in trouble because they blow way too much money on back-office SGA? I ask because they seem to charge a lot and have mostly full buildings.
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I just mean it’s a bet that the spread between long-term and short-term rents will be better than the cost of capital. That will be true, until it isn’t, and there’s no barrier to entry in the meantime.
It's a bit more than that. WeWork has a brand, it has scale (my membership works in NYC and Tokyo) and they have purchasing power too with so many locations... They're just poorly managed. All of real estate is just the spread between short term and long-term.