14 Okt Wework Management Agreement
Billing and Payment – A summary of the payment process, the parties involved, and any services that may result in additional charges. For example, shared meeting space and print services may incur additional costs if they exceed the amount allocated by a tenant described in the agreement. We talked at length about the benefits of the coworking space, mainly the flexibility it offers to organizations. However, some additional benefits are often overlooked, especially in the accounting and legal aspects of a coworking contract. “Management agreements align the interests of owners and operators,” he notes, adding that the model eliminates the near-competition that previously existed between owners and large coworking operators. After all, coworking users are local and dominate their space needs themselves, so there`s no reasonable reason to adopt the hotel management model that has deprived owners of valuable assets and turned hotel brands into misaligned management monsters that reduce returns and increase risk. Real estate companies will continue to enter the industry, and Blackstone makes a valid point when it notes that these companies don`t know the pros and cons of running a flexible workspace. This means that there is a great opportunity for workplace operators to increase and increase their revenue and impact by entering into management agreements with owners. It took the hotel industry 30 years to move from traditional leases to management contracts. Management contracts represent a great opportunity for operators, especially as owners are increasingly interested in adding coworking spaces to their current and future portfolios. WeWork`s financial model has been heavily criticized for relying too much on signing long-term leases that have left them unprotected in the event of an economic downturn.
The coworking giant has already taken significant steps to protect itself by buying real estate and entering into management contracts. Still, their rapid growth doesn`t yet allow their numbers to add up, and WeWork hasn`t been a profitable company yet. Operators such as flexible workspace, commercial property management and coworking companies see this as a great opportunity to expand their portfolio of spaces without taking more expensive leases and paying for equipment. As a result, they are able to reduce risk while increasing the valuation of their business. .