Speaker 1: Bloomberg Audio Studios, podcasts, radio news been.
Speaker 2: Very mixed for earning so far this week.
Speaker 3: Large corporations from PEPSI to p ANDNG cutting their outlooks
Speaker 3: due to Trump's tariff policy. One company, however, thinks they'll
Speaker 3: benefit from the uncertainty.
Speaker 2: We Work, which.
Speaker 3: Provides coworking spaces for companies and individuals. It's hoping that
Speaker 3: market risks will help it bounce back from bankruptcy. Joining
Speaker 3: us now is that we work?
Speaker 2: CEO? John Santora, John, it's good to see us, sir.
Speaker 2: Thanks for being mid morning. John, give me the strategic
Speaker 2: cup date.
Speaker 3: What is the strategy now and how has it changed
Speaker 3: in this certain period for the company compared to a
Speaker 3: very uncertain period for the company a number of years ago.
Speaker 4: So where we work stands today. We're a maturing company.
Speaker 4: We're a company that has no debt. We're investing in
Speaker 4: our portfolio around the world. We're investing in our members
Speaker 4: and our people. So it's a very different place today
Speaker 4: than it has been in the past.
Speaker 2: Does it rely on a different kind of business?
Speaker 4: Our business is flexibility, right, and to be able to
Speaker 4: provide from one to one thousand seats for companies for
Speaker 4: the entrepreneurs that's always been a part of our business.
Speaker 4: Right it's about twenty five twenty seven percent of our business.
Speaker 4: Then you have the smaller and mid sized companies fifty people,
Speaker 4: hundred people, and then you have that whole enterprise platform
Speaker 4: that we have which has been really growing the last
Speaker 4: year or so.
Speaker 3: Are you finding those changes are coming because of what
Speaker 3: developed during the pandemic coming out of the other side,
Speaker 3: It's not what forced the issue for the latch of enterprises.
Speaker 4: I think if you look historically during different markets, right,
Speaker 4: there's always that downturn, there's always that need to sub
Speaker 4: lease space. We always take too much space, and good
Speaker 4: times we'd get rid of too much space, and bad
Speaker 4: times we fill that gap. So giving them twenty or
Speaker 4: twenty five percent of their portfolio, that's flexible increase it,
Speaker 4: decrease it without taking the hit to your books, without
Speaker 4: writing off that space and writing off all the capital,
Speaker 4: and being able to provide uh I that flexibility in
Speaker 4: markets around the world is key.
Speaker 5: So where are we right now with respect to the
Speaker 5: ends certainty that we hear from corporate executives around the country,
Speaker 5: is this a time where they want to ramp up
Speaker 5: their flexibility and increase their footprint with you this or
Speaker 5: pull it back because they actually see that as a
Speaker 5: lever that they can pull without being seen too much.
Speaker 4: This is a time any pores, A recession or whatever
Speaker 4: is not good for any company. Right for us, our
Speaker 4: clients are saying, I'm going to with the pause. I'm
Speaker 4: not sure if I'm going to take more space, I'm
Speaker 4: not sure if I'm going to cut back.
Speaker 1: They pretty much are pausing.
Speaker 4: With us, and that doesn't cost them anything.
Speaker 1: Right, they stay in.
Speaker 4: Our spaces, they'll move, they'll adapt in different markets.
Speaker 1: We talked about it. You talked about India earlier on
Speaker 1: the show.
Speaker 4: We're seeing a big move out to India with our
Speaker 4: clients in all the big banks, all the financial institutions
Speaker 4: are growing their presence in India. The clients you mentioned,
Speaker 4: Apple and so forth, they're all looking to take more
Speaker 4: space in India. But are they going to take ten
Speaker 4: and fifteen year leases with the uncertainty of what's going
Speaker 4: on in the market, look to a player like us
Speaker 4: to give them that flexibility.
Speaker 5: Just to be clear, are you seeing stasis when it
Speaker 5: comes to leasing right now?
Speaker 1: Or are you seeing.
Speaker 5: Leases increase in places like India and decrease in places
Speaker 5: that previously have been popular. I'm wondering whether it's even
Speaker 5: some of the Northeast cities.
Speaker 4: I think it's a little too early to tell what
Speaker 4: the long term effect will be. But you know, in
Speaker 4: discussions with CEOs and CFOs, are you willing to make
Speaker 4: that fifteen year commitment to a market today? With the uncertainty,
Speaker 4: you have to pause. You have to think about it.
Speaker 4: You have to think whether or not to invest that
Speaker 4: major capital in a market, at least for this short term.
Speaker 5: You have to step back in the go go days
Speaker 5: of we Work. I remember that every time a building
Speaker 5: was getting rebranded, it was going to be a WEE work.
Speaker 1: When I was walking around.
Speaker 5: The city and there was this massive expansion plan and
Speaker 5: then there was a retrenchment.
Speaker 1: Are you back in expansion plan?
Speaker 5: Are you looking for acquisitions in terms of properties or
Speaker 5: are you kind of happy with your footprint and just
Speaker 5: expanding in other ways.
Speaker 4: Yeah, we have a really good footprint now it's been restructured.
Speaker 1: We're in the markets we want to be in.
Speaker 4: We're in the markets that are our members want to
Speaker 4: be We're in the right product Over time, though, for
Speaker 4: the first time in the history of the company. We're
Speaker 4: going through a traditional lease exploration, so we'll look to
Speaker 4: upgrade in some markets. We may look to leave a market,
Speaker 4: but that's.
Speaker 1: Going to be a rare, rare, rare case.
Speaker 4: We like the markets that we're in, so we're gonna
Speaker 4: do some upgrades here and there.
Speaker 5: During the pandemic, we saw a number of companies move
Speaker 5: from New York to Florida. Are you seeing companies still
Speaker 5: leave New York?
Speaker 4: You know, I'm not grounded in real estate and grounded
Speaker 4: pretty much in New York real estates where I've always
Speaker 4: lived in New York and always worked out in New York.
Speaker 4: The New York market is the It's the capital of
Speaker 4: the world, right It's the capital of finance. It's the
Speaker 4: capital of most companies. Their headquarters are there. A lot
Speaker 4: of companies or headquarters are there. It will always have
Speaker 4: a presence, it will always be important.
Speaker 1: They'll always be headquarters.
Speaker 4: There be some changes though over time, people will adapt.
Speaker 1: When it comes to.
Speaker 5: New markets that are across the US, are you seeing
Speaker 5: more of a build up.
Speaker 1: No, we're not West West Coast.
Speaker 4: Yeah, we're not seeing that much. We're seeing markets start
Speaker 4: to return. I was in San Francisco three times so
Speaker 4: far this year. We're seeing that market start to return.
Speaker 4: We're seeing people on the street, we're seeing buildings start
Speaker 4: to fill up.
Speaker 3: Finally cleaned up Basisi. Are you happy with progress?
Speaker 1: They've made progress. They've definitely made progress.
Speaker 2: One needs to change that. How do they fix this mess?
Speaker 4: I think I think part of it is, you know,
Speaker 4: it's security, it's safety.
Speaker 1: Right.
Speaker 4: People need to feel safe when they're going to work.
Speaker 4: They need to feel safe as they're walking the streets.
Speaker 4: They need to feel safe on the subways and the
Speaker 4: transit systems.
Speaker 3: John it's going to see you, sir, great. Thanks, thank
Speaker 3: you for having me. John Son soa that we work
Speaker 3: CEO