A big sale of Florida commercial real estate raised eyebrows not just for its hefty price tag, but also because one of the names involved was WeWork, a highly valued office space startup that is going through some very public struggles.
According to news reports, an international partnership of investors is purchasing several buildings in the Tampa area for more than $156.9 million. The deal involves a total of 756,138 square feet of office space.
One of the buildings involved has recently changed its name to WeWork Place. WeWork is a New York-based chain of shared-office space locations. The fast-growing startup has gone through turmoil in recent months amid fears that it was running out of cash. The company’s founder was forced out, and two new chief executives brought in. Plans for an initial public offering of stock were postponed.
However, the company has said that it is on the hunt for more funding and expects its outlook to turn around.
Meanwhile, WeWork owns more than 490,000 square feet of office space in South Florida, or about a third of the market in the area. It has three floors in WeWork Place and plans to expand into two more.
Put all this information together and it presents a somewhat confusing picture of the commercial real estate market in Florida. The market is still hot, but there are signs of possible trouble on the horizon.
Commercial real estate is a high-risk business, but can also be high-reward. Managing those risks and rewards takes careful legal planning, as well as business acumen. It’s important for buyers, sellers, investors and others to speak with attorneys who have experience in commercial real estate law.