WeWork CEO John Santora Talks Benefitting From Tariff Uncertainty
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It's been very mixed for earnings so far this week. Large corporations from Pepsi to P&G cutting their outlooks due to Trump's tariff policy. One company, however, thinks they'll benefit from the uncertainty. WeWork, which provides co-working spaces for companies and individuals, is hoping that market risk will help it bounce back from bankruptcy. Joining us now is the WeWork CEO, John Santora. John, it's good to see you, sir. Thanks for being with us. Good morning, John. Give me the strategic update. What is the strategy now and how has it changed

this certain period for the company compared to a very uncertain period for the company a number of years ago. So where we work stands today. We're a maturing company. We're a company that has no debt. We're investing in our portfolio around the world. We're investing in our members and our people. So it's a very different place today than it has been in the past. Does it rely on a different kind of business? Our business is flexibility, right? And to be able to provide

from 1 to 1,000 seats for companies, for the entrepreneurs, that's always been a part of our business, right? It's about 25, 27% of our business. Then you have the small and mid-sized companies, 50 people, 100 people. And then you have that whole enterprise platform that we have, which has been really growing the last year or so. Are you finding those changes are coming because of what developed during the pandemic coming out the other side? Is that what forced the issue for the larger enterprises?

I think if you look historically during different markets, right, there's always that downturn. There's always that need to sublease space. We always take too much space in good times. We get rid of too much space in bad times. We fill that gap. So giving them 20 or 25 percent of their portfolio, that's flexible. Increase it, decrease it without taking the hit to your books, without writing off that space and writing off all the capital. And

being able to provide that flexibility in markets around the world is key. So where are we right now with respect to the uncertainty that we hear from corporate executives around the country? Is this a time where they want to ramp up their flexibility and increase their footprint with you or pull it back?

because they actually see that as a lever that they can pull without being seen too much. This is a time, any pause, a recession, whatever, is not good for any company, right? For us, our clients are saying, with the pause,

I'm not sure if I'm going to take more space. I'm not sure if I'm going to cut back. They pretty much are pausing with us, and that doesn't cost them anything. They stay in our spaces. They'll move. They'll adapt in different markets. You talked about India earlier on the show. We're seeing a big move out to India with our clients. All the big banks, all the financial institutions are growing their presence in India. The clients mentioned Apple and so forth.

They're all looking to take more space in India. But are they going to take 10- and 15-year leases with the uncertainty of what's going on in the market? They'll look to a player like us to give them that flexibility. Just to be clear, are you seeing stasis when it comes to leasing right now? Or are you seeing leases increase in places like India and decrease in places that previously have been popular? I'm wondering whether it's even some of the northeast cities. I think it's a little too early to tell what the long-term effect will be.

But in discussions with CEOs and CFOs, are you willing to make that 15-year commitment to a market today with the uncertainty? You have to pause. You have to think about it. You have to think whether or not to invest that major capital in a market, at least for this short term. You have to step back.

In the go-go days of WeWork, I remember that every time a building was getting rebranded, it was going to be a WeWork. When I was walking around the city, there was just this massive expansion plan. And then there was a retrenchment. Are you back in expansion plan? Are you looking for acquisitions in terms of properties? Or are you kind of happy with your footprint and just expanding in other ways? Yeah, we have a really good footprint now. It's been restructured. We're in the markets we want to be in. We're in the markets that our members want to be. We're in the right

product. Over time, though, for the first time in the history of the company, we're going through a traditional lease expiration. So we'll look to upgrade in some markets. We may look to leave a market, but that's going to be a rare, rare, rare case. We like the markets that we're in. So we're going to do some upgrades here and there. During the pandemic, we saw a number of companies move from New York to Florida. Are you seeing companies still leave New York?

You know, and I'm grounded in real estate and grounded pretty much in New York real estate where I've always lived in New York and always worked out in New York. The New York market is the capital of the world, right? It's the capital of finance. It's the capital of most companies. Their headquarters are there. A lot of companies, their headquarters are there. It will always have a presence. It will always be important. There will always be headquarters there. There will be some changes, though, over time. People will adapt.

When it comes to new markets, though, across the U.S., are you seeing more of a buildup? No, we're not. In the Midwest, West Coast? Yeah, we're not seeing that much. We're seeing markets start to return. I was in San Francisco three times so far this year, and we're seeing that market start to return. We're seeing people on the street. We're seeing buildings start to fill up. They finally cleaned up that city. Are you happy with progress? They've made progress.

They've definitely made progress. What needs to change there? How do they fix this mess? I think part of it is, you know, it's security. It's safety, right? People need to feel safe when they're going to work. They need to feel safe as they're walking the streets. They need to feel safe on the subways and the transit systems.

John, it's good to see you, sir. Thanks for being with us. Thanks for dropping by. John Santoro there, the WeWork CEO.

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