The former WeWork company (now rebranded to We Company) is under suspicion for a potential conflict of interest regarding CEO Adam Neumann's partial ownership of three properties whose tenant is his own company, WeWork.
TechCrunch has seen excerpts of the company’s prospectus for investors that details upwards of $100 million in total future rents WeWork will pay to properties owned, in part, by Adam Neumann.
In March 2018, Neumann had purchased a 50 percent stake in 88 University Place alongside fashion designer Elie Tahari. That property was then leased by WeWork, which then leased space within the building to IBM.
The WSJ has reported that 88 University Place isn’t alone. Neumann also personally invested in properties in San Jose that are either currently leased to WeWork as a tenant or are earmarked for such a purpose. Unlike 88 University, where Neumann is a 50/50 owner with Tahari, the CEO of the We Company — as WeWork is now known — invested in the two San Jose properties as part of a real estate consortium and owns a smaller stake of an unspecified percentage.
These transactions were all disclosed in the company prospectus documents it filed as part of its $700 million bond sale in April 2018. According to the prospectus, WeWork’s total future rents on these properties (partially owned by Neumann) are $110.8 million, as of December 2017.
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