WeWork’s Identity Change Comes as a Surprise for the Industry Backing It

WeWork recently underwent an identity change, which was puzzling enough for most of its investors. Prop Modo revealed that a number of its investors had either backed off or scaled down its investments. For one, it was announced that SoftBank has scaled back its investment in the company from $16 billion to $2 billion.

SoftBank might have believed in WeWork's innovative way of thinking, but the decision of Saudi Arabia and Abu Dhabi, two of its biggest funders, was in the way. SoftBank's backers seem to have decided that the co-working space developer was just a tad too many in real estate exposure and that SoftBank had many real estate investments on its portfolio, anyway.

SoftBank hasn't completely stayed away from helping real estate companies get the funding that they needed. Only last month, it funneled $1 billion into ParkJockey to help it complete the acquisition of two parking operators in North America. There are reasons behind their decision, but only SoftBank knows whether it has too much real estate properties on its plate.

Meanwhile, WeWork decided that a rebranding-however small it is-was in line when it decided to call itself "The We Company." Inc. reported that the name change was more than just face value. It was a hint that the company was moving on beyond what made it successful to new, exciting things.

Katrina Booker of Fast Company said that this was a move to go past beyond renting commercial real estate. It was, as she put it, timely in a sense that SoftBank just re-scaled its investment in the company. It was going into a direction where the brand was trying new things that would work, just like when Kentucky Fried Chicken decided it would transition into 'KFC' after the realization of its market that fried food was unhealthy when eaten frequently.

The pull-out of the entity backing WeWork just means that the company won't have as much investment as its comfortable with to buy properties for its use. Competitors Industrious, Knotel, and Convene also suddenly got needed leverage to avoid being left behind in the dust. An example of the adjustment that WeWork will have to do is to lease property in the new Saleforce towers in San Francisco, rather than buy units for the company's use.

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