WeWork launches 1st Burnaby location amid financial woes

WeWork opened its 56,000-sq.-ft. communal office space in Station Square shortly after reports from U.S. media that the company lost more than US$1 billion in three months

The tone was optimistic as local politicians and the business community came together Monday evening to celebrate the launch of WeWork’s first Burnaby location.

The two-floor, 56,000-sq.-ft. space opened recently in Station Square, and the company hosted members of city council and the business community for a grand opening.

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The Metrotown location is the sixth in Metro Vancouver and the first in Burnaby, with another location expected to be opened in the first quarter of 2021 in the Brentwood area.

WeWork is simultaneously a landlord and a tenant of office space – the company leases large office spaces, which it renovates into a communal office space, with smaller plots within leased out to individual professionals and companies.

The company has faced financial tumult in recent months – particularly in the three months ending in September, when it lost US$1.25 billion according to a report from the New York Times. That publication said the company was expected to lay off thousands of employees.

WeWork’s model was described by the Times as “an erratic expansion that included adding huge office spaces in the world’s most expensive cities.” Many of WeWork’s locations were losing money, according to the Times.

So why is the company moving ahead with two new locations in Burnaby? In a statement to the NOW, Stephen Tapp, WeWork general manager for Canada, said the company is “focused on smart, strategic growth across Metro Vancouver.”

“This continues to be a very strong market for us with a thriving core business, incredible demand and great assets,” Tapp said in an email statement. “Here on the front lines, the things all of us woke up to each morning three months ago are the same now and every day moving forward: creating an exceptional experience and beautiful spaces for our members.”

A WeWork spokesperson pointed to a CNBC interview in which the newly installed executive chairman, Marcelo Claure, said the company is expecting to have turned its financial situation around by 2021.

None of the skepticism that has permeated media reporting around WeWork was apparent at Monday evening’s ribbon cutting event in the location’s sleek, modern space.

“We are now so thrilled to be helping connect Burnaby and Vancouver. With WeWork, you can now easily work amongst these two cities,” said Brianna Iverson, WeWork community director for Vancouver, Burnaby and Calgary, in comments to attendees.

Burnaby Board of Trade president Paul Holden said, “When you get a global brand, such as WeWork, choosing Burnaby to be one of its major homes here in the Lower Mainland, I think it speaks to the quality of the business community and the potential that we have here in Burnaby.”

It’s not just WeWork that has faced challenges – Cmpny, a local startup offering co-working space, recently told its customers it would be closing its Burnaby location on Jan. 31, 2020 and its Coquitlam location on Mar. 31, 2020. The reason for the closures is not clear at this point.

But while WeWork has liabilities – mounting pressure from investors to become profitable – Mayor Mike Hurley said it also has advantages over Cmpny.

“It wasn’t as connected to other spaces the same. You can be connected to other spaces anywhere in North America with this,” Hurley said.

“So this one will have more – I think a lot more – behind it. But you never know [with] new businesses. Some of them fail; some of them thrive. And we hope that this one will thrive.”

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