- 6 minutes ago
When John Santora became CEO of WeWork, the company was emerging from bankruptcy, saddled with one of the most notorious failures in business history. The longtime commercial real estate player is leading the company’s next act: proving that flexible work can be a disciplined, profitable business.
As part of Business Insider’s The Long Play, Santora shared what it takes to turn a damaged company into one built to last and offered insight into a real estate market being reshaped by how we work now.
He also talked about how AI is affecting real estate with Cadie Thompson, Business Insider’s deputy news chief and executive editor.
As part of Business Insider’s The Long Play, Santora shared what it takes to turn a damaged company into one built to last and offered insight into a real estate market being reshaped by how we work now.
He also talked about how AI is affecting real estate with Cadie Thompson, Business Insider’s deputy news chief and executive editor.
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00:03WeWork has had a very tumultuous storyline and that seems to be shifting under your
00:09leadership. As I understand it, you guys are about to enter your third straight
00:14quarter of cash profitability. You generated some 2.3 billion dollars in
00:202025 in revenue which was up from 2.2 in 2024 and you're planning on spending
00:2680 to 100 million dollars this year investing in your properties. Does that
00:33all sound right? That's all correct. Okay, great. Although it's four quarters when we
00:36close this one. Okay, okay. And I want to talk to you. We're not public so I can say. I
00:42want to
00:42talk to you about your role in that because you had quite the full career
00:47before beginning at WeWork. You spent some 47 years at Cushman and Wakefield, started
00:53as a building engineer, rose up to COO and then one day you call WeWork's new owner
01:01after they come out of bankruptcy in 2024 and you offered a help on behalf of
01:05Cushman and Wakefield and the next thing you know is you have a job offer on your
01:09desk to be CEO. I want to know what made you believe that this was a risk worth
01:16taking at this point in your career and what made you believe that WeWork had a
01:22second act in it and that you were the right person to lead that second act.
01:26Okay, so all correct. Thank you. It's been a pleasure being here today. I've had some
01:30great speakers and you may have gotten a short story here but I think we'll be
01:35all right. Wow, so Anant Yardi who I've known for 30 some odd years when I was with
01:43Cushman and Wakefield. Yeah, I picked up the phone. I called him and I said, Anant, you
01:48just bought a real estate company. How can we help? You know, fast forward through a
01:53couple of days. He made an offer for me to be the CEO to take the company out of
01:58bankruptcy as it closed out of bankruptcy to take it going forward. So, you know, after
02:0747 years in one company, even though I was kind of at that point of, should I retire
02:13what's next in my world? I went home, talked to my wife and Debbie and I have
02:19been married now 48 years. I talked to the two kids who were both grown and
02:23married with their own children and I said, Look, I'm thinking about doing this.
02:28What do you think? So Debbie knows that me sitting still doesn't doesn't really
02:34work. My daughter Nancy said, Dad, you know we love you but when you got too much
02:39time on your hands, you're paying the ass. So I said, Okay, I'm gonna go do this. But
02:45honestly, it was knowing that this model was important to the real estate industry.
02:53We've talked so much today about people we've met just here that all have started
02:59in a WeWork or in a WeWork today looking for WeWork space. Knowing how important it
03:07was to the real estate industry that that I lived for 47 years, but the brand was
03:13tarnished. I had a fleeting moment where do we change the brand and then realize,
03:21look, there's been some great brands that have made it through some bad times and
03:27that we could do this. And so what was the biggest change? Actually, let me ask you
03:33this first. Adam Neumann remains a very large part of the WeWork story. People
03:40largely associate him still with that brand. Is there anything, first of all,
03:44have you ever spoken to Adam Neumann since you've taken on this role? And is there
03:48anything that you think the original WeWork did right that you want to try to
03:53preserve? So no, I haven't spoken to him since I've taken this role. What did WeWork do
03:59right that we had to preserve? The whole model, the concept of being able to work
04:05from anywhere, access a space when you need it, or be able to, as a company, be
04:14able to have real estate that's flexible, right? The old model was you had a
04:22headquarters that you either owned the building or it had a 15-year lease. You
04:27still need that today. That's your brand, right? And then you would have all your
04:32other spaces around the world or around the markets would be 10-year leases. You
04:38have to put massive capital into those leases. So think today, if you were going
04:44to do a 100,000 square foot lease, you'd put in 300, 400 bucks a foot, so 40 million
04:51dollars to build it out. We can put you in that space where it's already built
04:57or pretty much built. We'll put our own capital in it, and you can take it in the
05:02shorter term.
05:02So what does that mean with the rise of AI? Because AI is creating a lot of
05:09uncertainty. Companies don't know if their head count is going to be what it's
05:13going to be tomorrow, let alone six months from now. So I'm curious to find out
05:17like how is that impacting your business? Is it good? Is it bad?
05:21Well, uncertainty isn't good for anyone, right? For any industry or any business. But not knowing how much space you
05:32need,
05:32or how many employees you're going to have. That is kind of in our sweet spot.
05:38So think about it from you move into a market, and does the market work or not work? If you
05:46invested in a 10-year lease, at some point you have to write that off and write off
05:50all your capital. Where you come to us, or you come into Flex World, we can provide that
05:57for you, and then if you determine you want to be there long term, you can take a longer
06:01term lease or whatever. And we can grow with you or shrink with you as markets change.
06:07And today with the AI company, today with all companies, but let's talk about the AI
06:12companies for a minute. Their growth is so rapid. They can't possibly do a real
06:19estate transaction to meet their growth needs. Or they do add a whole bunch of
06:25people, and then they make some changes within a market. So we can do that in 30, 60, 90 days,
06:33get you up and running in that space. I can give you a great scenario. We had a top 10
06:40bank that was
06:41looking for 50,000 square feet in the middle of London. And they were trying to find a space. We
06:48met with
06:49them in the end of November of 25. We signed a management agreement at the end of December.
06:57By March, they were in their space up and running. 50,000 square feet in three months. Think about
07:03the competitive advantage that gave that bank in that market. And by the way, it's great space because
07:09one of my friends works for the bank, the branch here. And he said to me, I don't know what
07:14you guys did
07:14in London, but everybody's talking about that space. What are you seeing in terms of AI startups?
07:20You know, we're seeing AI be a booming business, and we're seeing a lot of startups in this space.
07:25I believe I read you guys have something like 200? Yeah. Recent count is about 300
07:30AI companies within our spaces around the world. And they go from, you know, the onesie, twosies,
07:36entrepreneurs that are starting a business to all the large firms that you hear about each and every
07:43day and all the models that you're using each and every day. So I love when I walk into some
07:49of our
07:49offices where there's lots of AI companies. In San Francisco, for example, you walk down the hallway,
07:55and there's a bunch of small AI firms. And you can see them writing on the glass. And the guy's
08:01on the
08:01other side of the wall, and he's pointing at, and they're actually building models between offices or
08:08between companies. And it's just so exciting to see that. How are you changing your spaces
08:12to serve this clientele? How are we changing our spaces? It's the next level up. It's the next
08:20generation. So, you know, some of the neon lights are gone and those wild colors and the flowers and
08:27all of that. A little more corporate. But they're being designed more for what is needed today. So
08:34sound attenuation. We need to have a certain number of offices to open spaces. The open spaces aren't rows
08:42and rows of desks. They're around having quiet spaces, having teaming spaces, having the ability
08:49to, you know, have great meetings and meetings where people are interacting. So it's a little more
08:59corporate. It feels a little more corporate. But it's what's needed today in today's environment.
09:06You've talked a little bit about what you thought was worth keeping at WeWork. I'd love to know what you
09:11think the biggest change you've made or the change that you've made that's made the biggest difference
09:15since you've taken on and been leading the company. I think from a leadership standpoint,
09:22I'm a very structured, disciplined person, focused. But I also understand the important part. We have
09:31three contingencies, right? So we have our employees, we have our members, and we have our landlords that we
09:38have to deal with. So the first thing is to go out and build trust with all three of them,
09:44right? We
09:44have an employee base that had, what, four CEOs over a three-year period. So why do I trust this
09:52little
09:53chubby Italian from Staten Island? What is he going to bring? And what's he going to, you know, do for
09:58us
09:58and take us to the next level? So you have to sit with them, explain the model, explain the vision,
10:04explain where we stand financially. The beauty was, as we exited, we had cash on hand. We had enough
10:12cash on hand that we didn't have to worry about making payroll and making rental payments and
10:17everything. So that's, you know, a grounding and a comfort for our employees. But it also is for our
10:26members and for our landlords. And quickly understood that a lot of our largest members
10:32are firms that I dealt with in my history at CNW. So that was welcoming. And there was a level
10:40of trust
10:41that I had already built and genuine relationships that I had with some of them. And the same thing with
10:46the landlord. So helping that kind of create a sense of calmness and a sense of stability going forward
10:55was one of the important things. I also restructured the leadership team, put presidents in each
11:01region so that they were responsible for profitability, not just sales and not just operations, but own the
11:08profitability of the regions, which was, I think, a really important part of it. I also understand you
11:14changed some things about the dress code, not only for your employees, but also for yourself. Yeah. So why
11:21don't you tell us about what that was? So a little bit of fun. So when I first walked in,
11:26it was
11:26summertime. It was the middle of June. And we had everything from, you know, all kinds of jeans and
11:33everything as you would expect to pajamas and slippers and shorts and so forth. And I grabbed my head of
11:42HR
11:43and I said, you see that and you see that. I don't want to see it anymore.
11:49But it's actually evolved. So many of our, you know, sales team have really upped their game.
11:57There's a lot more sports jackets around the office. They're not always wearing it, but they know if
12:03they're going to a meeting, especially if they're going to a meeting with a, with an enterprise client,
12:08you know, up your game a little bit. There's a lot more shoes. There's still a lot of sneakers.
12:15And I now, I always have a sports jacket in the office. Fridays, I'll actually sometimes wear sneakers,
12:22depending on what my schedule is. And it's kind of an acknowledgement to them, right? And it's a good
12:28give and take. And so it's really fun. It's true. I struggled. I really did the first
12:35six months. I mean, I'm a suit and tie buttoned up real estate person, but I'm good now.
12:45We've talked about how AI is changing the economics of the actual workspace, but it's also changing
12:50a lot for the people inside those offices. And I want to chat a little bit about that because you
12:58come
12:58from a very corporate background, being in the office, I'm sure five days a week, working a lot.
13:04As AI takes on more responsibilities or more tasks that workers are doing,
13:09what do you think is worth us holding on to? What becomes more valuable about being in the office?
13:19Lots become valuable about being in the office or continue to be valuable. It's the collaboration,
13:26it's the learning, the mentorship that goes on, the collection of data for us. So we have 45 million
13:36square feet around the world, which is the size of any reasonable city. And all that data,
13:43I know exactly how many coffees are served in a space, how many desks there are, how many people
13:50enter or leave. Capturing all that data is fabulous because it now allows our people to up their game
13:59and to use the data, build strategy, work as teams on how to, how do we market our space better?
14:08What are
14:08people using more? Well, we need more conference rooms. Look at the data on the conference rooms.
14:13We don't have enough conference rooms on Thursdays. So we, oh, we don't have enough VC equipment,
14:19right? So that allows the team to be more strategic, to be looking forward as to what our next steps
14:28are and
14:28where the vision's going. So I, I, it's a, it's a wonderful tool. Does it replace, um, some tasks that
14:37people do? Absolutely. It's never going to be a leader. It's never going to be a mentor. It's never
14:44going to have empathy and understand what people need. Um, it's never going to replace your HR department
14:51when people need, you know, a shoulder to lean on if they've got a challenge or need some help. So
14:57there's a,
14:58there's a, an important role for it, but it continues and will always continue to be
15:03an important role for people. And I, I, I often say that as leaders and leaders in this room,
15:11it's incumbent upon us to be hiring the next generation, mentoring them, training them,
15:18and giving them the tools to run our companies in the future, right? We can't lose that.
15:24No, sorry, I got on my soapbox there a little bit. All very good points.
15:28Um, you spent, like I said, 47 years at Cushman and Wakefield. Do you feel like that kind of career
15:35can still exist in the future that, you know, decades at one company?
15:40I, I don't, I don't believe so. I mean, that's going to, it's rare. It's going to be very rare.
15:46I believe today that the opportunities for people to grow, people need to move and change. I, I did it
15:55because I had a new job every couple of years. I went from an engine room to a manager to
16:02handling
16:02a region, handling the world, right? Doing all kinds of different things and tasks. So I felt like my
16:08job was changing a lot. Unless you're in a place where you're growing and you have opportunities to
16:15advance your career, um, do something different. Also to give back to the communities. Yeah, I think,
16:24yeah, I think going forward lots of people will, um, have four or five jobs in their career
16:33or companies. Yeah. Given that your views have evolved on that, right? You don't have to spend your
16:38whole career at one company. What are your views on being in the office every day? So, um, what I
16:48require the WeWork folks to be there? Yeah. So I, I require the WeWork folks to be in the office
16:55four days and the fifth day is you're working, but you're working from wherever you want to work.
17:01I hope you want to maybe work at a WeWork that's closer to your home or you're working from home
17:06or
17:07whatever. I do say to them if I call, I don't want to hear, you know, attention Walmart shoppers in
17:15the
17:15background. But I also say, I understand that life gets in the way. I didn't have that ability. I didn't
17:23have the ability to go watch my son play a three o'clock baseball game. I didn't have the ability
17:30to
17:31work from home. Where was my phone? My phone was in a physical office. My files were in a physical
17:37office. We all have it with us everywhere. So, um, and you can't have every, every time you've got to
17:45go to a doctor or a dentist, it has to be Saturday and try to get a Saturday appointment, right?
17:50So,
17:50I can't even get an appointment. We have to give our employees that flexibility to do all that.
17:55And I don't, I don't look at what time they leave, what time they come in. I know where my
18:02mindset is,
18:03but as long as they're getting their work done and they're keeping their clients happy,
18:08they're flexible on the hours, flexible on the days they're in. And unless somebody's completely abusing
18:15it, we don't, I don't track it then. Okay. We've got very short time left, but I do want
18:21to quickly ask you a lightning round. Um, if you could snap your fingers and change anything about
18:27WeWork spaces, what would it be? I'd upgrade them all and technology. Great. Um, and what is one
18:35thing that you have learned at WeWork that 47 years at Cushman and Wakefield could not have taught you?
18:41Well, um, how important that flexibility is, um, within our spaces. I mean, I saw it,
18:51but now I live it and I see how important that is. Okay, great. We're at time. So,
18:55thank you so much, John. I appreciate it. Okay, thank you.