The company signed only four leases covering 184,022 square feet of space in the last three months of 2019, marking a 93% drop from an average of 2.54 million square feet over the previous four quarters, according to data that real estate firm CBRE shared with CNBC and will release publicly this week.
With such a dramatic slowdown, WeWork ceded the top spot in the flexible office leasing market to Spaces, owned by Regus parent IWG, which increased its new lease footprint by 11% to 284,916 square feet in the period from its four-quarter average, CBRE said.
WeWork’s pullback reflects a downsizing of the business after SoftBank took over 80% control in October with a $5 billion financing package that kept the company afloat. The next month, WeWork announced 2,400 job cuts, or about 19% of its total workforce, as part of an effort to “create a more efficient organization.” The company has divested noncore businesses and shut its WeGrow private school while telling employees that it will focus on serving large businesses rather than small and mid-sized clients.
The industry-wide numbers from CBRE show how much WeWork had come to dominate the co-working space market, fueled by billions of dollars in equity funding from SoftBank.