Convene CEO anticipates more flex M&A in WeWork’s wake

The co-founder of events and meetings space operator Convene has predicted a new phase of industry consolidation in the wake of WeWork’s bankruptcy, and has said that his own company could be on the acquisition trail. Ryan Simonetti took to social media to give his take on what WeWork’s bankruptcy means for the flexible office sector and Convene. Among his predictions was that the process would “further accelerate consolidation within the ‘flex’ sector”. “Personally, this is one of the biggest opportunities I see for Convene [in] the next 24-36 months,” he wrote. “In the end, I believe you will see two, maybe three, global platforms with real scale that operate multiple brands, similar to the hospitality industry.” Simonetti said WeWork’s bankruptcy would “ultimately be good for the industry and good for WeWork”. “There is too much ‘commodity’ coworking space in the market and the reduction in excess inventory will ultimately help to create a better balance between supply and demand,” he said. “In the long run, this will help improve top-line performance for most operators and create greater financial stability in the sector.” As for WeWork itself, Simonetti said a “smaller, profitable and healthy” version of the company would emerge from the Chapter 11 protection – eventually. “This is an extremely complex restructuring and I don’t see WeWork emerging for at least 9-12 months,” he said. “Complicated dynamics within WeWork’s capital structure and the underlying assets that they inhabit will make negotiations challenging. Given the scale of WeWork’s footprint in individual buildings, any significant lease modifications will require the simultaneous restructuring of the underlying capital structure of the assets they occupy.” To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews