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We are CEO of the company in hot water, being both a tenant and a landlord – TechCrunch



The company formerly known as WeWork has been screened for potential conflicts of interest concerns regarding the partial ownership of Adam Neumann's CEO on three properties where WeWork is (or will be) a tenant. TechCrunch has seen excerpts from the company's prospect for investors that specify more than $ 100 million of future rentals that WeWork will pay for properties owned by Adam Neumann.

In March 2018, The Real Deal announced that Neumann had bought a 50% stake in 88 University Place along with fashion designer Eli Tahari. This property was hired by WeWork, which then gave IBM space in the building.

Today, WSJ reports that 88 University Place is not alone. Neumann also personally invests in properties in San Jose, which are currently leased to WeWork as a tenant or intended for such purpose. Unlike 88, where Neumann is the 50/50 owner of Tahari, We Company CEO WeWork is already known to invest in both properties in San Jose as part of a real estate consortium and holds a smaller share of indefinite percentage

All of these transactions were disclosed in the company's prospectus brochures as part of the $ 700 million sale of bonds in April 201

8. According to the prospectus, WeWork's total future rentals for these properties (partially owned by Neumann) are 110.8 million dollars, Oh December 2017

This does not include buying a property from Chelsea from Newman and $ 65 million partner, which is said to be for a new space built from the ground. This will also be subject to rental payments from WeCompany to execute WeLive

This raises the question of whether there is a conflict of interest when Neumann is both owner and tenant of property through WeWork. WSJ says the company's investors are concerned that CEO can personally take advantage of rentals or other terms with the company in these deals.

According to WeWork, however, the company is not aware of any problems from its investors about related party transactions or disclosures. The company also stated that the majority of boards were independent of Adam and all these transactions were approved

A WeWork spokesman also had this to say: "WeWork has a review process for related party transactions. These transactions are reviewed and approved by the board and they are disclosed to investors. "

In its current form, The We Company is privately owned and in the midst of transition as it provides how to make a significant profit in more than 400 property assets around the world. The company takes advantage of a broad-based approach, serving small start-ups and large corporate customers, while offering co-hosted rental tenants and building the Powered By We platform to spread their bets.

$ 47 billion, even after a reduced investment from Softbank (from $ 16 billion to $ 2 billion). But as our company seeks IPO, we can start to see a call for stricter corporate governance and a more careful review of potential conflicts of interest.


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