Daily Digest March 29
Daily Digest March 29

Hand selected flexible workspace news from the most reliable sources to keep you ahead of the pack. We find all the latest news, so you don’t have to. Morning and afternoon updates. Stay in the know.

Here’s what you need to know today:

Did Adam Neumann Help Facilitate WeWork’s New SPAC Deal?

A surprising ousted character from the WeWork saga may have played a part in the coworking company going public again.

Reports found that in November, Adam Neumann, the company’s cofounder and former CEO of WeWork, met with the head of BowX Acquisition Corp, the special purpose acquisition company (SPAC) that WeWork plans to merge with in a $9 million deal.

During this time, Neumann and SoftBank were in the midst of a legal battle after the Japanese conglomerate walked away from a $3 billion tender offer. The lawsuit was settled last month after the two parties reached an agreement for SoftBank to pay half of its original commitment.

Sources said that Neumann and co-chief executive of BowX Acquisition Vivek Ranadivé met over a Zoom call that was facilitated by a senior UBS capital markets banker, but this occurred before the SPAC chief met with WeWork.

Ranadivé’s SPAC was seeking an acquisition target after raising $420 million in an IPO last August, and Neumann’s boisterous discussion of WeWork caught his attention.

However, the sources with knowledge of the meeting said it occurred on the condition of anonymity and Neumann had no role in the new agreement after his initial conversation with Ranadivé.

The new SPAC deal will help alleviate the blow that SoftBank has faced after its massive investments into the coworking company totaled $18.5 billion.

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San Francisco’s Office Market Recovery Will Be Slow

The pandemic has left a lasting impact on San Francisco’s office market, which is still attempting to swim to the surface after facing historically low leasing activity.

In order to return to pre-pandemic numbers and make a swift recovery, business leaders agree that offering tenants with higher-quality office products will be vital.

“We spend about 90% of our time indoors, and that’s probably increased now during the Covid time period,” said Christina Bernardin, Development Manager at Boston Properties at Bisnow’s The Future of Office in San Francisco webinar. “So this has been a priority for our tenants and a priority for us as developers — delivering buildings that they want to be in.”

One of the biggest themes in discussing how to bring tenants back in is creating a work environment that focuses on the health of occupants.

Advanced features like air purifiers, spatial utilization and more will be crucial in attracting people back to the office.

In the meantime, San Francisco has seen a slight uptick in office tours, leading to an increase in foot traffic in neighborhoods.

However, Moody’s Analytics still anticipates that rent will decline by 15.25% in the city’s central business district this year.

While experts are still optimistic about the market’s future for growth, they admit that it will be a slow process that will take tweaking and flexibility.

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The Problem With SPACs

Just a few months short of WeWork’s IPO attempt two-year anniversary, the company has found a new method of becoming the public company it has longed to be.

Last week, the coworking firm announced it would be going public by merging with special purpose acquisition company (SPAC) BowX Acquisition.

Much has changed from its initial attempt to go public, notably a plummeted valuation from $47 billion to just $9 billion, as well as a new CEO.

The SPAC process happens when a group of investors form a shell company, then raises money to purchase an unknown private company, in this case WeWork. This means that companies may make inflated projections about future earnings, something not allowed with IPOs.

Additionally, the target of the acquisition does not have to face the same level of scrutiny as companies who take the IPO route.

SPACs also have the issue of being required to find a company to buy within two years of raising the money, or face having to return the money and pay millions in fees.

Because of this short period of trying to find a target, SPAC sponsors may not have the time to fully scrutinize a company’s reliability.

“They have the option to redeem their investments, plus interest, for a modest but predictable return almost no matter what happens with the acquisition,” said Andrew Ross Sorkin, business columnist for the New York Times.

Credit: Unsplash

Is Remote Working Helping Companies Become More Green?

A calculator developed by Watershed Technology Inc. revealed how moving to a fully remote or hybrid work model can reduce a company’s carbon emissions, but may have an adverse impact on a single employee’s footprint.

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On the surface, less cars on the road and energy usage in office spaces seems like a great move to becoming more sustainable. But the reality is that emissions are shifted away from company offices and towards employees’ homes.

As businesses become more accepting of remote and hybrid arrangements, data has come out about the positive impact that reduced commutes could have on the planet.

However, this does not take into account where new remote employees have moved to in the past year, like the suburbs. For instance, a distributed team may lead to more trips for in-person meetings, which could increase the number of miles a person has to drive or fly.

“If this remote-work world encourages more people to move out of the urban core and into the suburbs, it may look like emissions for the company are going down, because commutes are going down,” said Taylor Francis, cofounder and president of Watershed. “But the actual total carbon in the world is going up.”

So if companies want to truly want to create a green workforce, they will need to take into account how workers can reduce their footprint when outside of the physical workplace, but still on the clock. This means offering subsidies for public transit, limiting flights for company-wide meetings and purchasing carbon offsets for employees’ homes.

Credit: Bigstock

Leaders Need To Be Honest About Their Mental Health

The pandemic has led to one of the worst mental health crises the world has ever seen. As society looks to rebound, companies need to prioritize the mental health of employees.

However, at the foundation of this much-needed change of focus is the actual wellbeing of business leaders themselves.

Higher ups have also been dealing with their own fair share of increased stress over the past year, but it is rare that they are open and transparent about their struggles.

So if companies want to create a work culture that truly values the importance of wellbeing, it needs to start from the top. 

According to a report from health insurance firm Bupa, 78% of business leaders reported having poor mental health during the pandemic.

Leaders need to be self-aware about their own struggles in order for companies to create an honest and non-judgemental workplace. And that also means participating in any company-wide initiatives meant to tackle mental illness.

Some initiatives have been created to address this issue, such as The Global Business Collaboration for Better Workplace Mental Health that aims to increase mental health awareness in the workplace.

Not only does this type of awareness benefit a business leaders’ own wellbeing, it allows them to identify the signs of deteriorating mental health throughout the company, and take the necessary actions to support workers who are facing obstacles.

Credit: Bigstock

How Countries Are Embracing Digital Nomads

With the uprise of remote workers, the population of digital nomads has also skyrocketed, leading countries to find new ways to offset the losses caused by decreased tourism.

Estonia, which has one of the most advanced digital governments, introduced a digital nomad visa in 2018.

“We saw a gap in the visa market precisely because nomads have been forced to exist in this legal grey area between ‘tourist’ and ‘worker,’” said Alex Wellman, communications lead for Estonian e-Residency, the country’s digital resident initiative. “We took the opportunity to solve that problem with a legitimate route for location-independent workers to base here. As a society, we recognize the need for overseas talent to contribute to the development of our business ecosystem, labor market, and overall economy.”

In order to be eligible for the visa, participants have to have an employment contract with a non-Estonian company, conduct business through their own company or be a freelancer, and have a monthly income of at least $4,160 for the six months prior to applying.

Additionally, Barbados launched its Welcome Stamp program just one month prior to Estonia’s, allowing remote workers to relocate to the island for up to one year as long as they have an annual income of $50,000 and agree to purchase local health insurance.

“We are not a large nation, so the digital economy gives us our window of opportunity,” said Peter Thompson, the entrepreneur who pitched the visa. “Getting ahead as a country is not just what you know, but who you know,”

Credit: Bigstock


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