The We Company, the parent of shared workspace provider WeWork, announced this week it launched a global real estate acquisition and management platform, ARK.
The company explained that ARK will focus primarily on acquisition, development and management of real estate assets in high-growth markets and gateway cities that will benefit from WeWork’s occupancy. The platform’s operations will be based in New York City.
Put simply, The We Company will use ARK to buy buildings which it can then use as WeWork locations. So, instead of paying to rent out space in existing buildings, then turning around and renting that space back out via its co-working spaces, The We Company will use ARK to cut out the middleman and become its own landlord.
According to the company, WeWork will deploy its space-as-a-service model in ARK owned or operated properties for the company’s member companies, including its Enterprise business, which represents more than 40% of its global memberships.
The company explained in a press release that ARK is going to capitalize on the company’s existing foundation in real estate acquisition and management represented by WeWork Property Advisors. WeWork Property Advisors is an investment advisor affiliate of The We Company and Rhône Group and will combine with ARK as part of the platform's launch, the company said.
“We have seen firsthand the value that the WeWork ecosystem can create for landlords and real estate partners,” Rich Gomel, managing partner of ARK said. “The launch of ARK will help drive growth by leveraging The We Company’s extensive real estate experience and network. ARK has been set up to capitalize on that opportunity and allow us to provide different partnership options for the real estate community to participate in the growth and expansion of the We Company.”
Following its combination with WeWork Property Advisors, ARK will initially deploy $2.9 billion in total equity capital. The We Company will be the majority owner of ARK, according to the company's press release.
ARK will be chaired by Steven Langman, managing director of Rhône Group and a member of The We Company’s board of directors. He will also serve as chairman of ARK’s management committee and will serve on investment committees for the platform.
Additionally, Wendy Silverstein, formerly of New York Reit and Vornado Realty Trust, will serve as ARK’s chief investment officer.
To access a broad range of real estate opportunities, ARK will leverage its access to The We Company’s site selection process and proprietary technology, as well as its relationships with partners and enterprise member companies, according to the company.
The company also announced a significant source of capital has been tapped to support the platform, coming from its strategic partner Ivanhoé Cambridge.
Ivanhoé Cambridge, a real estate investor and subsidiary of Caisse de dépôt et placement du Québec, is providing substantial capital and support to the platform. According to The We Company, Ivanhoé Cambridge plans to collaborate with ARK on real estate acquisition and property management.
“Like The We Company, we believe there is enormous upside in disrupting traditional norms of real estate. We share the same vision, commitment to social responsibility, and long-term approach towards real estate making this a natural partnership and one that we are confident will be transformational for both companies,” Sylvain Fortier, chief investment and innovation officer at Ivanhoé Cambridge said.
