March 12, 2018
Jason D. Rowley is a venture capital and technology reporter based in Chicago.

WeWork—a company that provides co-working and office space to startups and, increasingly, big corporations—appears to have raised another $400 million. But unlike prior fundraising rounds, this financing comes in the form of a small suite of pooled investment funds focused on real estate. It’s a continuation of a partnership between WeWork and a large private equity firm to purchase real estate outright for WeWork’s use.

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The capital raises were possibly discussed in preceding media coverage, but the recently-filed SEC documents make plain the scale of the raise, time frames, and potential size.

According to SEC filings, WeWork has raised four new funds in partnership with Rhone Group, a private equity firm with offices in New York, London, and Paris. The funds, with newly-posted funding updates, includes:

All four funds list “We Work Property Investors LLC” and “WeWork Property Investors UPGP LLC” as promoters. Citi Private Advisory and Lazard & Co. were compensated for their roles in the sales process, which also saw investment from overseas investors of unspecified locale.

This three-tiered structure is very similar to the legal framework venture capital, private equity, and real estate investment firms employ. A general partnership and management company are set up as limited liability companies which in turn marshal the resources invested in one or more investment funds, typically structured as limited partnerships.

The paperwork for these funds were originally filed back in March, 2017. At the time, some reporting suggested that WeWork and Rhone Group, collectively, had already raised “hundreds of millions of dollars” for the real estate investment funds. Indeed, WeWork and Rhone Group purchased the Lord & Taylor building in New York City for $850 million in October 2017, a deal which included a $500 million purchase by Rhone Group of convertible shares in Lord & Taylor’s corporate parent, Hudson’s Bay Company.

Crunchbase News concludes that some, if not all, of the approximately $400 million in capital formally filed today went toward the acquisition of the Lord & Taylor building. The “date of first sale” listed on today’s amended filings is March 16, 2017, over six months before the purchase of the iconic Manhattan retail building, which is slated to become WeWork’s corporate HQ.

Up until recently, WeWork has almost exclusively leased its spaces, but this signals an ongoing strategic pivot for the traditionally asset-light office space provider that owned no real estate of its own until recently.

WeWork did not respond to questions from Crunchbase News concerning the filings or its future real estate investment plans. According to filings, the four funds are able to raise an “indefinite” amount of funding and have no listed closing dates, leaving open the possibility for more direct purchases of real estate in the future.