Yardi Systems, the US-based global real estate data and software company that plans to take a 60% stake in troubled flexible office provider WeWork for $337 mln (€315 mln), came out on Tuesday with a long statement over its interest in rescuing the company.
The Santa Barbara, California-based group said the proposed plan - which is still subject to approval by WeWork’s creditors – is for Yardi’s investment company, Cupar Grimmond, to take a majority stake following the company’s emergence from US Chapter 11 bankruptcy proceedings.
Existing significant investors and other creditors would hold the remainder of the company’s equity.
Yardi stated: ‘As a leading global provider of software and software services for commercial and residential property owners, Yardi is committed to supporting the long-term success of WeWork and the co-working industry. We believe a hybrid workplace is the model of the future, and that we have the experience and innovative technology to help power this transition.’
Yardi is well-known to European real estate firms for its software solutions and is often exhibiting at the main trade shows.
‘We initially formed a technology partnership with WeWork in 2022 with the launch of the WeWork Workplace app, which enables companies and employees to seamlessly work in traditional leased and owned office buildings, flex and coworking spaces, or their homes. Since then, we have been highly involved in scaling and developing this software and additional WeWork technology services.’
‘In 2023, we were approached to assist the company by providing capital through our investment arm, Cupar Grimmond, as part of WeWork’s restructuring transaction. Following our participation, we have played a supportive role as a senior secured lender during the Chapter 11 process.’
Yardi chose to invest in WeWork’s latest fundraise by providing debtor-in-possession (DIP) and exit financing.
On Monday this week, a federal bankruptcy court in New Jersey, US, approved the outline of the plan.
A vote wil take place on 30 May.
Hedge funds will put in another $113m mln for 20%, and creditors including SoftBank will get the remaining 20%.
The company is now estimated to be worth $750 mln. It was once stated at $47 bn.
Founder Adam Neumann wanted to re-acquire the company, but that desire seems looks to have been frustrated by the restructure plan.
Yardi said: ‘We believe the company’s fundamental value proposition remains intact and that it can have a successful future. Under the plan, WeWork would emerge from bankruptcy with no debt, adequate working capital and positive free cash flow. We intend to help drive the revitalization of WeWork in a manner that sustainably serves the best interests of its stakeholders – including the company’s landlords. Importantly, post-bankruptcy WeWork would be operated as a separate entity managed at arms-length from Yardi’s core business.’
