The fall from stardom and commercial grace has been difficult for WeWork co-founder Adam Neumann. Investors pressured him in 2019 after hyper growth, a staggering $47 billion valuation and a failed IPO after S-1 financial details revealed, among other things, a $900 million loss on $1.5 billion in revenue, as CNBC reported.
In November, Neumann publicly expressed some of his regrets. However, the Massive departure deal that was close to $1.7 billion, according to the wall street journal, apparently offered a soft cushion. As the Newspaper also reported in 2019, he also sold some stakes and borrowed against others to cash in on a estimated $700 million that was invested in a family office.
Some details are now leaking suggesting Neumann is going old school through his family office, 166 2nd Financial Services. “Entities linked to Mr. Neumann have quietly acquired majority stakes in more than 4,000 apartments valued at more than $1 billion in Miami, Atlanta, Nashville, Tennessee, Fort Lauderdale, Florida and other U.S. cities, according to the court, property and company records and persons familiar with the transactions”, such as the Newspaper reported Tuesday. “A lot of these investments have taken place in the last year.”
The apparent aim is to buy existing Class A properties and build a “widely recognizable apartment brand with amenities”.
“The pandemic has created a moment for people to reset and reevaluate their lives, including where they live,” Joel Steinhaus, CEO and founder of Daybase and former WeWork executive, told GlobeSt.com. “With increased flexibility and remote working, many cities have the opportunity to be net beneficiaries of mobility based on quality of life and cost of living. Some of these same cities do not have sufficient or accessible housing, so multifamily development in fast-growing markets is a market that has only grown in demand in the short to medium term. Apartment rental as a product has inherent flexibility, and flexibility between work and life will only demand a premium post-pandemic.
Pushing on the amenities front – a value-added game – combined with high-end properties is not an unusual approach. What’s a little more unusual, but not unheard of (think Donald Trump’s approach), is aiming for a widely recognized brand. In this case, one targeted young professionals who had at one point responded to WeWork properties.
And like a recall of a 2019 New York Times article, Neumann has long had a broad vision: “He envisioned customers residing in WeLive apartment buildings that would lower suicide rates because ‘no one ever feels alone.’ He envisioned a WeGrow school and an effort to to house the world’s orphans (“We want to solve this problem and give them a new family: the WeWork family.”) There was talk of a WeBank, WeSail, WeSleep, an airline.
Neumann’s investments also go beyond apartments, according to Crunchbase. 166 2nd Financial has made investments in at least four technology companies in 2021: Doorsey (online home buying platform), Ualá (fintech), Unybrands (e-commerce platform) and Valon Technologies (loan manager technology residential mortgages).