WeWork's parent firm, The We Company, has launched a $2.9 bn (€2.6 bn) investment business to own and redevelop commercial real estate across the globe.
Dubbed Ark, the US co-working giant's venture will initially deploy $2.9 bn in equity capital, including a significant investment of $1 bn from Canadian investor Ivanhoé Cambridge.
The We Company will be the majority owner of the venture, which represents a significant strategic shift for the hitherto 'asset light' business. WeWork founder Adam Neumann told Bloomberg the firm was betting on the idea that properties become 'more valuable' when occupied by WeWork.
The private fund is to be managed independently from WeWork Property Advisors, an investment vehicle the flexible office provider has been running in partnership with private equity business Rhone Group. It will remain under the executive team's control as part of an umbrella company, but plans to obtain most of its capital from outside investors, sources said.
Plans for Ark, which will be led by former WeWork president Rich Gomel, were leaked towards the end of last year, when the fund was rumoured to be inking its first deals in North America.
Former New York REIT CEO Wendy Silverstein is understood to have been appointed as Ark's chief investment officer.
Earlier this month, WeWork confirmed that it filed confidentially for an initial public offering in December, as part of ongoing drives to fund the business, after losses doubled to $1.9 bn in 2018.
