The incoming CEO has experience with a company in crisis, however, the challenges at WeWork are different/Bloombergby Bloomberg
WeWork has appointed Sandeep Mathrani as its new Chief Executive Officer, tapping an experienced real estate operator for a bid to turn around the embattled start-up.
Mathrani, who was previously Chief Executive of Brookfield Property Partners’ retail group, will need to execute a plan for WeWork to refocus on co-working and abandon unrelated ventures started by its co-founder, Adam Neumann.
In a statement, WeWork said that Mathrani will replace Artie Minson and Sebastian Gunningham, the duo has served as co-CEOs of WeWork parent We Co. since Neumann stepped down in September 2019 following a failed attempt to take the company public.
Mathrani is set to join the company on 18 February 2020 with Minson and Gunningham staying on through a transition period.
The incoming CEO has experience with a company in crisis. Mathrani helped GGP, a shopping mall operator, emerge from bankruptcy in 2010. The company saw its stock rise, boosted by properties such as Las Vegas’s Grand Canal Shoppes and Virginia’s Tysons Galleria. Brookfield paid around $15 billion for the 64-year-old business in 2018 and kept Mathrani on to oversee the retail operation.
The challenges at WeWork are different. Neumann co-founded the start-up in 2010 and rapidly built a global empire of office spaces where companies or freelancers could rent by the desk. Investors fueled the expansion, and SoftBank made by far the biggest bet, pushing the valuation to $47 billion.
The initial public offering (IPO) process laid bare WeWork’s many vulnerabilities. The company was spending far more than it was generating in revenue and suffered from an over-dependence on Neumann, who took out loans from WeWork as it paid him rent on buildings he owned.
WeWork pulled the IPO in September 2019 and agreed to part ways with Neumann in an exit package valued at more than $1 billion.