WeWork is quietly trying to take over . . . everything. As we wrote last week, thanks to a new (financially disappointing) investment from SoftBank, the company has big ambitions to take over nearly every aspect of life–including real estate and education. That real estate is integral to its success, as WeWork needs to lease spaces in order to provide its myriad services. And it turns out that WeWork’s CEO, Adam Neumann, reportedly co-owns some of the very properties the company uses, according to the Wall Street Journal.
This new report, which cites people familiar with the situation, says that Neumann has “made millions of dollars by leasing multiple properties in which he has an ownership stake back to WeWork.” Of course, buying properties to then lease to your company is one way to make additional money, but it’s quite unorthodox, too. Writes the WSJ: “Corporations typically bar executives from similar arrangements, given that companies risk paying too much in rent or leasing buildings they ordinarily wouldn’t.”
And yet Neumann has reportedly done just this. The newspaper claims he co-owns at least two properties–one in Manhattan, another in San Jose. And WeWork has expansion plans for this California space, too, thanks to a new residential service it’s launching. Neumann also reportedly tried to buy a portion of a building WeWork was in the process of leasing in Chicago, but the company’s board raised some concerns.
In our most recent interview with him, Neumann said the company has seen lease prices falling over the last year. Of course, what wasn’t mentioned was that he was likely on both ends of those deals. A WeWork spokesperson provided me with the following statement: “WeWork has a review process in place for related party transactions. Those transactions are reviewed and approved by the board, and they are disclosed to investors.”
You can read the full report here.