WeWork’s $20 billion valuation is the talk of the town, but the company’s co-founder Miguel McKelvey is evidently tired of hearing about it.
“You can say OK it’s your opinion I’m overvalued or undervalued. Like, who gives a shit? It doesn’t affect me and the business I’m trying to do,” he said at a CornellTech@Bloomberg event Tuesday night. “Valuation does not come into the equation. So why do we even need to be in that discussion? I don’t care. Everyone else in the world [can] discuss it.”
McKelvey’s claim is debatable, to say the least. The co-working company’s valuation allowed it to raise billions from investors under favorable terms. Earlier this year, the company landed a $4.4 billion investment from Japanese conglomerate SoftBank, in part to fuel its expansion into Asia.
McKelvey described the firm’s foray into Japan as a kind of cultural crusade. “Let’s just say that work culture in Japan is messed up, right, I think that a lot of people would agree with that,” he said. “We’re looking at it as entering the market to help shift that reality.”
McKelvey reiterated that the company doesn’t see itself as a co-working company, but as a “community company” involved in several different business lines and acknowledged that this can sound vague. “It’s hard to go home for Thanksgiving and explain what WeWork is,” he said.
In recent months, the firm has launched a gym and even an elementary school. Its WeLive co-living business, however, has stalled somewhat. The company once planned to have more than 30 co-living locations open by the end of 2017, but now it only has two (with a third on the way). McKelvey blamed the complexity of real estate development for its slow progress.
“WeLive, to do it right, is mostly ground-up construction,” he said. “Conversions, which we did, are okay, but to do it really well, to create the environments we think are the best, we prefer to do ground-up.”
“The cycle for ground-up development, to do it with partners, is so much longer,” he added. “So there are many projects that are in process but you just don’t hear about them yet.”
The Real Deal reported last week that an investor group led by WeWork’s other co-founder, Adam Neumann, bought a $65 million mortgage on a Chelsea development site. The assemblage had been rumored as a potential location for a WeLive project, but it wasn’t clear whether that’s still the target.
In October, WeWork made headlines when it announced the $850 million acquisition of the Lord & Taylor building in Midtown in partnership with private equity firm Rhone Group. McKelvey said the media’s excitement about the deal took him by surprise. “We were not in the market for a building like the Lord & Taylor building thinking, ‘That’s what we have to get,’” he said. “The notoriety that came with it wasn’t planned. And to be honest, it was a surprise to us because we didn’t know that many people cared about that.”