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Comment by goatinaboat | Hacker News Reader

They will be in Regus/IWG the next week, and a week after that will have forgotten that WeWork ever existed.

Does Regus/IWG have the capacity to absorb the demand?

Apparently the two companies are roughly the same size in terms of square footage under management. (IIRC IWG is a little bigger.)

So not likely IWG could absorb significant percentages of WeWork customers on short notice.

If WeWork goes under there are going to be large amounts of co-working space going cheap.

...so short CRE REITs, am i right?

I don't advocate active trading unless you have substantial non public information, and I don't think this meets my non-public criterion

Stay out of REITs anyway; once they have your money they essentially never have to give it back. I can't imagine how something so illiquid could be shorted in the first place.

Aren't REIT mutual funds the most likely vehicle for a retail investor to invest in REITs?

That's a good problem to face.

IWG is tiny (a mere $3b in revenue; $4b-$5b market cap), they'd never land all of WeWork's customer base or WeWork itself. They'd trivially be outbid. SoftBank would acquire WeWork and continue operations before they'd let the business go to a small company like IWG or watch WeWork get acquired for ~$500m-$1b (which is all someone like IWG could afford).

Far larger players like SoftBank, Blackstone or KKR would be all over scooping up the bones of WeWork. There's certainly no scenario where WeWork doesn't end up in the belly of a private equity company, or a large real-estate holding company. The next recession will destroy them. They'll be lucky if they survive even outside of a recessionary environment.

IWG is tiny

This analysis looks very different if you do it not in dollars but in sq ft, or in desks. IWG is much bigger than WeWork, but realistically valued.

IWG has 10x the total square feet to rent that We Work has.

WeWork is on pace to hit ~3-4b revenue this year

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