Coworking giant WeWork is facing competition from all sides.
For years, the 9-year-old company had rivals like Knotel, Industrious and Convene nipping at its heels, duplicating the idea of renting out space and giving shorter-term, more flexible deals to tenants that WeWork perfected-but recently, landlords and brokerages have started competing with WeWork directly.
The partnerships will differ in each case, Pontius said, but WeWork has been discussing agreements like revenue share where it’ll split top-line gross revenues with landlords, profit sharing to divvy up net profits with owners, or simple operating agreements where WeWork will manage the property for a set fee.
Under that deal, WeWork will share build-out costs and revenue with RXR. The 75 Rockefeller Plaza deal was in the works before Pontius joined and her team hasn’t signed any agreements yet, a WeWork spokesman said.
“A lot of landlords have the perception that WeWork in some sense is being competitive to their business,” said Peter Hansen, a vice president in WeWork’s real estate partnership division who joined the company from Boston Properties in February.
The partnership agreements will do more than just help WeWork stave off competitors.
While partnership agreements can lower costs in opening up new WeWorks, setting them up can be a much longer and arduous process than a standard lease, Pontius said.