Noun. A decent, upright, mature and responsible person.
Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail. A loser.
Mensch of 2017:
Is it a really surprise that this industry disruptor took the cake for 2017? Not at all. But, we will spell it out for you if we must.
The company was founded in 2010 by Adam Neumann and Miguel McKelvey in SoHo. After noticing fast growth, the co-working spaces started popping up all around Manhattan. By 2013, WeWork had nine locations in Manhattan, Boston, Washington D.C., San Francisco and more. Three years later, the company boasted 111 locations across 33 cities. Just this year, WeWork introduced it’s 200th location. Since December 2016, the company doubled its number of employees.
WeWork’s $20B valuation has caused some alarm. In October, the Wall Street Journal published an in-depth critique of the company. The ultimate question: will its success last? Eliot Brown, the author of the expose, wrote:
“WeWork’s strategy carries the costs and risks associated with traditional real estate. Its client list is heavily weighted toward startups that may or may not be around for long. WeWork is on the hook for long-term leases, and it doesn’t own its own buildings. Vacancy rates have risen recently, and the company is increasing incentives to draw tenants.”
We love realistic criticism. However, 2017 was not the year for the company to fall. In October, WeWork purchased the Lord & Taylor building on Fifth Avenue in Manhattan for a mere $850MM. A move which solidified the fall of traditional retail and rise of co-working. The company also expanded its co-living platform WeLive and announced plans for a third location in Seattle. The 36-store mixed-use development will be WeLive’s largest project yet.
Other than expanding real estate footprint, the company made serious tech initiatives this year. WeWork acquired The Flatiron School, a programming and coding school, which it plans to roll out on a national scale. The company also paired up with fellow disruptor Airbnb. The partnership allows business travelers who book through Airbnb to reserve a spot at a nearby WeWork location while in town. In another intitiative to bring people together (and take over the world), WeWork bought social networking platform Meetup last month.
It also partnered with Samsung to offer “care centers” and dished out money to the female-only co-working space The Wing. Did we mention this was all thanks to a $4.4B investment from Japanese fund SoftBank?
Sure, the company may have expanded a little to quickly. However, the Founders are keeping their options open. In 2018, we’ll no longer refer to WeWork strictly as a co-working platform.
Schlemiel of 2017:
Nope, the retail sector didn’t take loser of the year. Sure, Xceligent only just announced its defeat. However, it’s a big one for property data companies.
Earlier this month, The Daily Mail and General Trust’s real estate data subsidiary Xceligent was valued at zero. This was after a yearlong legal battle with competitor CoStar. CoStar accuses the firm of stealing and re-selling the company’s proprietary images and data.
Over the Summer,under former CEO Doug Curry’s leadership, Xceligent filed a counter-suit against its competitor. The 139-page document accused CoStar of utilizing internet blocks, data alteration and violating restrictions placed on the company in 2012 by the Federal Trade Commission.
In late October, bullish CoStar filed suit on RE BackOffice, a contractor of Exceligent. After the contractor admitted to hacking CoStar’s website, Doug Curry was relinquished as CEO.
On December 14th, Xceligent shut down all operations and filed for Chapter 7 liquidation. According the The Real Deal, a note to staff alerted all employees to vacate the building immediately. The 250 employees, mostly based in Kansas City, Missouri, were let go.
Who’s to blame? A former Executive says the CoStar lawsuit:
“What shocked me is that they have a real business. The problem is, they were just bleeding money. With that lawsuit…CoStar just crushed them! Jesus.”
However, a spokesperson for DMGT told The Real Deal that the Chapter 7 filing had nothing to do with the CoStar litigation. Likely story.
Perhaps Xceligent isn’t the only loser at the end of 2017. Many commercial real estate professionals lost access to property information following the shut down. Even worse, the industry is fearful of CoStar further monopolizing data access.
Some are fearful of CoStar raising prices. Others hope for a disruptor to surface and potentially tap into the case and buy it out of bankruptcy. However, CoStar CEO Andrew Florance warned any potential buyers, implying similar legal action. “That content was illegally taken and cannot be resold,” Florance commented. “So if someone takes that content and tries to now resell it, it still belongs to us.” Yikes.