Friday, May 27, 2022

WeWork buys Common Desk

Global company acquires downtown Wilmington coworking space

Global company WeWork will acquire coworking business Common Desk, which has a location in downtown Wilmington. (Port City Daily photo/Alexandria Sands)

WILMINGTON — One year after Common Desk opened its first Wilmington location in the historic Gaylord building downtown, it was announced Tuesday the Texas-based company will trade hands. Flexible workspace firm WeWork plans to acquire the business by March.

Terms of the deal, including price, were not disclosed. Following the merger, Common Desk will rebrand under the name “Common Desk, a WeWork Company.”

Both WeWork and Common Desk confirmed to Port City Daily local employees and members will not be affected by the change and business operations will remain the same.

“When Common Desk came on WeWork’s radar, and following a thorough evaluation of the business and operations, it became clear that an opportunity existed to partner,” Common Desk spokesperson Jenna Bailey said.

After negotiations, the companies decided Common Desk should be fully absorbed into the WeWork family.

“Common Desk offered WeWork the opportunity to learn from their combined operational and brand expertise,” Bailey said. “It also offered us the opportunity to grow our own footprint without signing additional long-term leases, something WeWork has been vocal about pursuing.”

Founded in 2012, Common Desk has expanded its network to serve 4,000 customers at a total of 23 locations across 13 cities in Texas and North Carolina. Locally, Common Desk operates with nine conference rooms, 34 private offices, four team suites and shared desk areas throughout three floors in an extensively renovated building on Front Street

Common Desk community manager Aaron Ellis told Port City Daily last year the company had expanded to Wilmington for its growing market and revitalized downtown area. The historic building it’s located in was once the Gaylord Big Racket Store, Wilmington’s first department store, in the 1900s. A wholesale supplier was housed on the top floor. Since then, the building was transformed into a Belk in 1917 and then a Walgreens. It sat vacant as of the 1980s — until Common Desk brought it back to life.

Developed by East West Partners, the Gaylord building was gutted, but its history and structure were preserved. 

“Over the past decade, Common Desk has achieved disciplined growth through strategic management agreements with landlords that have enabled the company to perform at strong margins by minimizing capital expenditures,” according to a press release.

It also notes, 19 of its 23 locations are operated under management agreements, which has successfully grown the business.

WeWork was founded in 2010 to create flexible work environments with technology-driven turnkey solutions. It operates 800 locations worldwide, with two in North Carolina, in Raleigh and Durham.

Both Common Desk and WeWork have similar missions and business models, and the acquisition is expected to allow both brands to expand.

“With an eye toward partners most aligned with our priorities, Common Desk presented itself as a sophisticated operator with a compelling approach to providing a top-notch member experience without sacrificing strong margins or an exceptional product,” WeWork CEO Sandeep Mathrani stated in a press release. 

Mathrani was hired as CEO in 2020 and took the company public (NYSE: WE) in October 2021. The acquisition of Common Desk is the first since it began selling off prior acquisitions during founder and former CEO Adam Neumann’s time at the helm. In 2020, WeWork sold off office management startup Managed by Q for $25 million and social network Meetup for an undisclosed amount and offloaded its stake in women’s workspace provider The Wing.

In 2019, Neumann stepped down amid financial struggles and following a disastrous attempt at an Initial Public Offering (IPO). 

WeWork’s third quarter earnings, which ended in September 2021, show $661 million total revenue — up 11% from $593 million in the second quarter.

“On the heels of a strong year for our business, Common Desk’s operational expertise and portfolio of first-class space will further bolster our value proposition as we focus on strategic growth,” Mathrani said in the release.

The transaction with Common Desk fits into WeWork’s new strategy to streamline its business and increase revenue, according to a WeWork spokesperson.


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