Shared office provider WeWork has found a new chief executive as the financially challenged company takes another step in its struggle for profitability.
Brookfield Properties executive Sandeep Mathrani will join the New York-based firm as CEO on 18 February, according to a statement by WeWork on Saturday, where he will report to executive chairman Marcelo Claure.
Mathrani, who is currently chief executive officer at Brookfield Properties Retail, will be replacing WeWork veterans Artie Minson and Sebastian Gunningham who have shared the CEO position since founder Adam Neumann was ousted in September last year in the wake of the company’s failed IPO. Minson and Gunningham are expected to stay with the company during a transition to its new leadership, according to the statement.
WeWork Chooses a Retail Turnaround Expert
“Over the past 100 days since I joined WeWork, we have made tremendous progress strengthening the business,” Claure said in a statement.
The Softbank executive, who took on the chairman role at WeWork in October, added that, “During this time, we have led an exhaustive search to identify a collaborative partner who is dedicated to the future success of WeWork. Sandeep is that person. He is the partner of choice with the right skills and experience as we work to execute WeWork’s transformation.”
Mathrani had announced his departure from Brookfield last month, leaving the Canadian investment manager just one and a half years after its acquisition of General Growth Properties, a retail real estate investment trust where the new WeWork CEO had served as chief executive since 2010.
At GGV, Mathrani took over the Chicago-based firm shortly after it had emerged from Chapter 11 bankruptcy, and stayed at the helm until Brookfield bought out the REIT in a $15 billion deal in mid-2018.
A trustee of retail real estate non-profit the International Council of Shopping Centres (ICSC), Mathrani also has previous experience as an executive vice president at Manhattan-based Vornado Realty Trust as well as at Forest City Ratner.
Painting a Recovery Picture
In introducing WeWork’s new chief executive Claure fit the leadership move into a broader attempt to put the co-working pioneer on a path to profitability after it nearly ran out of cash late last year.
The Softbank chief operating officer emphasised that, following a cash infusion by the venture capital firm last year WeWork now has more than $2.5 billion in liquidity and predicted that the company will achieve profitability on an adjusted EBITDA basis by 2021, and would have positive free cash flow in 2022.
The recovery story comes after WeWork laid off an estimated 2,400 people in November last year after the serviced office provider reportedly lost $1.25 billion in the third quarter of 2019.
Last month Reuters reported that Singapore’s Temasek Holdings, together with Shanghai-based investment manager Trustbridge Partners, had offered to purchase a majority stake in WeWork’s China operations for an undisclosed amount. WeWork has yet to comment publicly on the reported buyout offer.