The We Company has announced the launch of its private real estate investment arm, ARK, in a move to establish the company as a landlord.
ARK will serve as a global real estate acquisition and management platform for the loss-making WeWork. The fund will initially deploy with $2.9bn in total equity capital, with a substantial part of that coming from institutional investor, Ivanhoé Cambridge of Canada.
The launch comes weeks after the office space trendsetter released a statement saying it had submitted papers to begin an initial public offering of its common stock in December. The revenues at the firm doubled from $886m in 2017 to $1.8bn in 2018, however it posted a net loss of $1.9bn last year making it unprofitable – a trend seen in recent tech IPOs.
WeWork will deploy its space-as-a-service model in Ark owned or operated properties, and use its technology and relationships to “stabilise assets by executing a proven pre-packaged business plan and will apply The We Company’s holistic solutions for real estate owners, based on The We Company’s established capabilities in sourcing, building, filling, and operating properties,” according to a press release.
Adam Neumann, CEO, is set to transfer some of his real estate holdings into the ARK fund, as reported by Bloomberg Businessweek.
The platform will be chaired by Steven Langman, managing director of private equity firm Rhône Group and a member of The We Company’s Board of Directors.