WeWork CEO John Santora Talks Benefitting From Tariff Uncertainty

Bloomberg Audio Studios, podcasts, radio news been.

Very mixed for earning so far this week.

Large corporations from PEPSI to p ANDNG cutting their outlooks due to Trump's tariff policy. One company, however, thinks they'll benefit from the uncertainty.

We Work, which.

Provides coworking spaces for companies and individuals. It's hoping that market risks will help it bounce back from bankruptcy. Joining us now is that we work?

CEO? John Santora, John, it's good to see us, sir. Thanks for being mid morning. John, give me the strategic cup date.

What is the strategy now and how has it changed in 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 one to one thousand seats for companies for the entrepreneurs that's always been a part of our business. Right it's about twenty five twenty seven percent of our business. Then you have the smaller and mid sized companies fifty people, hundred 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 of the other side, It's not what forced the issue for the latch of enterprises.

I think if you look historically during different markets, right, there's always that downturn, there's always that need to sub lease space. We always take too much space, and good times we'd get rid of too much space, and bad

So where are we right now with respect to the ends certainty 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 this 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 pores, A recession or whatever is not good for any company. Right for us, our clients are saying, I'm going to 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.

Right, they stay in.

Our spaces, they'll move, they'll adapt in different markets.

We talked about it. You talked about India earlier on the show.

We're seeing a big move out to India with our clients in all the big banks, all the financial institutions are growing their presence in India. The clients you mentioned, Apple and so forth, they're all looking to take more space in India. But are they going to take ten and fifteen year leases with the uncertainty of what's going on in the market, 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 you know, in discussions with CEOs and CFOs, are you willing to make that fifteen 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 we Work. I remember that every time a building was getting rebranded, it was going to be a WEE work.

When I was walking around.

The city and there was 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 are 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 exploration, 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 gonna 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, I'm not grounded in real estate and grounded pretty much in New York real estates where I've always lived in New York and always worked out in New York. The New York market is the It's 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 or headquarters are there. It will always have a presence, it will always be important.

They'll always be headquarters.

There be some changes though over time, people will adapt.

When it comes to.

New markets that are across the US, are you seeing more of a build up.

No, we're not West 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. We're seeing that market start to return. We're seeing people on the street, we're seeing buildings start to fill up.

Finally cleaned up Basisi. Are you happy with progress?

They've made progress. They've definitely made progress.

One needs to change that. How do they fix this mess?

I think 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 going to see you, sir, great. Thanks, thank you for having me. John Son soa that we work CEO