WeWork’s ongoing financial instability illustrates the broader challenge of making a communal business model work within a capitalist market, especially when compared to traditional real estate practices.
Traditional real estate investors are less likely to take risks in the way WeWork does. Renting a house can involve leasing to a single tenant or separately to several individuals for each room.
If WeWork owned its buildings, its situation would change. Their leases have shifted from initial five-year terms to fifteen years.
This challenge highlights the core difference between software companies, which scale based on coding and digital deployment, and real estate companies such as WeWork, which must navigate physical assets and long-term leases in a changing economy.
WeWork’s concept is not entirely new. In New York, many small stores, like gold and watch sellers, share a single building. However, those building owners do not have publicly traded stock.
