Co-working company buys D.C. office building for $136.5 million
WeWork Property Advisors (WeWork + Rhone Group) and The Meridian Group have acquired a 350,000 SF office building in Washington D.C. from Boston Properties for $136.5 million. The WeWork fund provided 50 percent of the equity for the deal, and the co-working company will occupy 100,000 SF of space, according to WTOP.
Double Dipping: This fund buys buildings where WeWork will be the tenant. Some investors were concerned for potential conflicts of interest as the co-working company is on both sides of the deal.
The Dubious Pitch… With its role as both a tenant and landlord, the fund could yield better investment returns than conventional real estate funds. In other words, there’s always a tenant in the back pocket (WeWork) who has demonstrated excellence in utilizing space.
Be Smart: Earlier this week, WeWork hired Colliers International to lease out its 220,000 SF of co-working space at the Dock 72 office building in the Brooklyn Navy Yard. This clearly runs counter to their pitch.