Businesshala News Exclusive | WeWork Co-Founder Adam Neumann Is Becoming an Apartment Mogul

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Entrepreneurs have bought a majority stake in buildings in southern cities, totaling more than $1 billion

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People familiar with the matter say Mr Newman has spoken to friends and colleagues about his ambitions to create a company that would shake up the rental-housing industry.

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Exactly how he plans to accomplish this goal cannot be learned, and his investments have so far been largely in traditional apartment buildings. Mr Newman has said he wants to create a widely recognizable apartment brand that is packed with amenities, according to a person who was part of these conversations. His Nashville property, the 268-unit Stack on Maine, features a saltwater pool, a dog park, and valet garbage pickup, according to the building’s website.

Mr Newman is hoping to appeal to the same kind of young professionals he lured into hundreds of co-working office spaces as chief executive officer at WeWork, people familiar with the matter said. Their flexible office space was renowned for offerings such as free craft beer and fruit waters.

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DJ Mauch, Partner at Mr Newman’s Family Office, said: “Since the spring of 2020, we are excited about multifamily apartment living in vibrant cities where a new generation of young people are increasingly choosing to live, the kind of Cities are redefining the future of life. We are excited to play a role in that future.”

According to a person familiar with the matter, Mr. Newman has also invested in several startups.

Mr. Newman co-founded WeWork in 2010 and raised more than $10 billion for a business that was once valued at $47 billion, prompting investors to value it as a tech company despite its real estate roots. agreed to give. He also launched WeLive, which was planned as a network of buildings where people could rent rooms in shared, furnished apartments. The company opened apartment buildings in New York and Virginia, but WeWork closed WeLive after Mr. Newman left.

The 42-year-old entrepreneur left the company in late 2019 after his management style and plans for an initial public offering of the stock fell through amid concerns over huge losses. WeWork, which is now publicly traded, has a market capitalization of approximately $7 billion. This valuation is more in line with real-estate companies than rapidly growing tech firms.

According to a person familiar with the matter, Mr Newman became wealthy by working at WeWork, and is using his own money to buy a stake in apartment buildings. According to documents and people familiar with the sale, when Mr. Newman served as CEO, he and his co-founder sold a total of more than $500 million in stock, mainly at higher share prices than today. According to a WeWork securities filing, to encourage Mr. Newman to relinquish control of the company, WeWork’s majority owner SoftBank Group Corp. paid him approximately $200 million for consulting and other fees and purchased $578 million of shares from him. .

Mr Newman helped fuel the US co-working craze through the rapid expansion of his company. At one point, WeWork occupied more Manhattan office space than any other company. But he’s already following the crowd in the hot apartment business.

The sector has experienced increasing investor interest since the start of the COVID-19 pandemic, especially in the rapidly growing Sunbelt. Rents are rising in many cities with rising household incomes and housing shortages, which analysts say are unlikely to disappear anytime soon. Cities like Nashville and Miami are also attracting immigrants from the Northeast looking for warmer weather, less expensive housing and lower taxes.

In 2020, Mr Newman joined Alfred Club Inc. , a company that provides concierge services such as groceries and laundry in residential buildings.

His real estate holdings, which include two apartment buildings in Atlanta, are mostly recently built properties with over 200 units and lots of common amenities.

According to court records, in Fort Lauderdale, an association associated with Mr. Newman is owned by Society Las Olas. According to the developer’s website, the 639-unit apartment building includes a co-working space, putting green and a barbershop.

In downtown Miami, Mr. Newman recently signed a contract to buy a majority stake in the 444-unit Caoba apartment tower, valued at about $200 million, according to a person familiar with the matter. Court records show that an entity linked to Mr. Newman also owns a nearby 387-unit Yard 8 apartment building.

Mr Newman has also invested in suburban apartments, where demand has grown as remote workers leave crowded city centers in search of more space. A person familiar with the matter said that according to public records, he held a stake in a building in Decatur, Ga., and another in Norwalk, Conn.

Write Konrad Putzier at [email protected] and Eliot Brown at [email protected]

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