Co working spaces as new asset class

Dear all,

In a recent REPE interview I got asked about Co Working Spaces as emerging asset class. I was asked about specific yield and risks associated with the asset class.

I reckon that this is probably the highest yielding and riskiest asset class in the market right now?

Any input is much appreciated.

Kind regards

 

Any lenders here have a favorable view of financing buildings that are 100% leased by a co working company. ?

That one building in Miami that is 100% leased to we work has been making the rounds for the past year and it comes across my desk every couple of months. If they cannot get financing for a year in a market where there is so much capital waiting to be deployed, it just tells me that the markets are not sure yet on how to treat co-working companies. The building here was treated worse than any other single tenant building.

 

I have seen both Co-Working PE investments and have seen buildings with Co-Working tenants

The tenants pay higher than market rent but when you sell the building it has a higher cap rate based on co working tenants.

The PE investments into a Co-Working company are asking you to throw money at a company that has negative EBITDA and every other couple spaces has a decent 4 wall EBITDA. You invest with the hopes of getting a valuation on revenue of like 10x to sell and I guess leave someone else holding the bag

So when you are looking for highest yielding yes as an office tenant but it hurts the value of the building

Highest yielding as a PE investment maybe if you can get your money out

As a Bond WeWork is a great high yielding junk bond if you think they will pay you back at par in 30 years.

 
Most Helpful

Et et pariatur aut et est ex architecto. Rerum quos non ab laborum culpa. Odit ab optio voluptatem ea. Sunt rerum a qui voluptates.

Quia magnam voluptas autem necessitatibus aut delectus necessitatibus. Dolorem placeat in dolore cum.

Career Advancement Opportunities

May 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Perella Weinberg Partners New 98.9%
  • Lazard Freres 01 98.3%
  • Harris Williams & Co. 24 97.7%
  • Goldman Sachs 16 97.1%

Overall Employee Satisfaction

May 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.9%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 05 97.7%
  • Perella Weinberg Partners New 97.1%

Professional Growth Opportunities

May 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.9%
  • Perella Weinberg Partners 18 98.3%
  • Goldman Sachs 16 97.7%
  • Moelis & Company 06 97.1%

Total Avg Compensation

May 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (21) $373
  • Associates (91) $259
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (68) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (148) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
kanon's picture
kanon
98.9
6
dosk17's picture
dosk17
98.9
7
GameTheory's picture
GameTheory
98.9
8
CompBanker's picture
CompBanker
98.9
9
numi's picture
numi
98.8
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”