Co-working giant WeWork, whose valuation fell by billions of dollars in light of a bungled initial public offering that revealed serious flaws in its business model, appears to be moving forward with plans to launch a downtown San Antonio co-working space in 2020.
The company declined formal comment last week, but a sales representative told the Rivard Report the planned location in the 300 block of East Houston Street is on pace for an August 2020 opening. Memberships to the San Antonio WeWork location are not yet on sale but could be in the early part of next year, the representative said.
Real estate development firm GrayStreet Partners is the landlord at the historic building under redevelopment. Peter French, director of development at GrayStreet, said the agreement WeWork signed to rent the second floor in the Grant Building at 305 E. Houston St. and the third, fourth, and fifth floors in the Kress Building remains operative.
“No news [on] our end,” French said by text. “Lease is in effect and construction continues.”
The fallout from WeWork’s error-riddled Form S-1, a prospectus companies file with the U.S. Securities and Exchange Commission ahead of going public, offered insight into the company’s unit economics. The company generally leases underutilized urban real estate, remodels it, and outfits it with amenities that appeal to tech startups and other urban professionals.
The prospectus unveiled an approximately $900 million loss that prompted scrutiny of its previous $47 billion valuation and called into question whether WeWork’s business model can be profitable. Since its dramatic fall from grace, WeWork has ousted its eccentric co-founder, CEO Adam Neumann, and laid off 2,400 employees, or about a fifth of its total workforce.
WeWork has more than 840 locations that are either open or coming soon in 123 cities throughout the world, according to its website. In Texas, the Dallas-Fort Worth, Houston, and Austin areas each feature several WeWork locations.
First announcing its intentions to launch in San Antonio in September 2018, the coworking giant said that it had been eyeing expansion in the city for some time.
The company’s impending arrival in San Antonio had been seen as validation of the city’s growing importance in the tech industry. Its offerings would complement, not compete with, co-working space Geekdom, the multistory Houston Street facility long seen as the spiritual home of San Antonio’s startup ecosystem, local tech leaders said.
In the months since WeWork withdrew its S-1 filing and postponed plans to go public, WeWork has opened new locations in Singapore and Manila, Philippines, but abandoned plans to open a co-working space in downtown Pittsburgh.