At the turn of the year, taking over as chief executive of WeWork might have looked like drinking out of a poisoned chalice. But that’s not how Sandeep Mathrani saw it.
The company had problems — big problems — but a lot going for it, too.
“I find it invigorating to find solutions. I like the adrenaline, like when you are running a marathon and the endorphins kick in,” Mathrani, the recently installed CEO of the world’s most high-profile flexible office company, told Bisnow in an extended interview last week. “There were a lot of levers to pull to make it profitable.”
WeWork is the most visible, and potentially the most arduous, turnaround job real estate has seen in living memory. Mathrani gave Bisnow the most detailed insight so far into the restructuring strategy that he is implementing, alongside Executive Chairman Marcelo Claure, SoftBank Group's chief operating officer.
There is no silver bullet: Every single one of WeWork's 828 locations is being reviewed, every building analyzed, Mathrani said. Sensitive negotiations with landlords and members are ongoing, some of which Mathrani conducts himself, with a variety of strategies being employed to try and turn around loss-making locations, which he said account for about 15% of WeWork's portfolio.
"About 85% of our buildings are profitable, so there, the model works going forward," Mathrani said. "With the others, we are being friendly and collegiate and trying to find a situation that is a win-win for us and our landlords.”
Rent cuts, lease extensions, management agreements and exiting locations are all in play in a restructuring that is playing out asset by asset. Somewhat surprisingly, Mathrani said he expects the company's footprint to actually grow between now and the end of 2021.
Nevertheless, WeWork has slashed more than 8,000 jobs in the past nine months, reducing its headcount by 60%, all of in pursuit of the one thing people in real estate and beyond never thought WeWork would achieve: profitability.