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Aug 4, 2022

WeWork offices now just as full as before the pandemic

Toronto’s Downtown Yonge business district seeing more visitors and from further away

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WeWork Inc. said offices were 72 per cent full at the end of the second quarter, matching the occupancy rate from before the COVID-19 pandemic in late 2019 for the first time.

WeWork’s occupancy rate — the percentage of its total desks that were rented out — dropped dramatically during the first year of the pandemic, when many tenants canceled their rental contracts and decided to work from home. That metric hit its low point of 46 per cent a year later.

The company pitched a turnaround story when it went public last year in a blank-check merger. WeWork’s buildings have slowly filled back up. WeWork management has maintained that more customers are drawn to its flexible office space offering as they attempt to figure out long-term real estate strategies in a new world of hybrid and remote work. It now has 62,000 subscriptions to its All-Access pass, a product that allows customers to book space for shorter increments of time.

Occupancy aside, the second-quarter performance was less rosy. The New York-based co-working company had US$815 million in sales, missing an average of analysts’ estimates compiled by Bloomberg of US$821 million.

WeWork continues to lose money and is narrowing that gap more slowly than predicted: Last quarter it reported a US$635 million loss when analysts expected US$479 million. Its loss in the second quarter is wider than the first quarter’s US$504 million. 

Still, the company is working on taming its once-roaring levels of cash burn. In the first quarter of 2021, WeWork lost US$2.1 billion, hit by the shockwaves of the ongoing COVID-19 pandemic and a hefty settlement payment to its co-founder and former chief executive officer, Adam Neumann. The company has also looked to expand its software offerings; in April, it said it would start selling tech tools to help companies manage manage their employees and their physical spaces.