WeWork is revamping its Canadian operations and has hired a former real estate executive to develop its office-sharing business from coast to coast.
Wayne Jacobs, who helped build Allied Properties Real Estate Investment Trust, has been hired to serve as WeWork’s Canadian head of real estate and business development, WeWork confirmed on Monday.
This is the latest Canadian hire for New York-based WeWork, which is trying to improve relations with Canada’s real estate industry ahead of a potential public offering.
“WeWork has now made a commitment to the Canadian marketplace,” Mr. Jacobs said.
The company, which leases office space for upward of 10 years and then subleases it at a premium for shorter periods, is expanding rapidly.
Toronto is considered one of its top markets, where WeWork will soon have nine locations, up from one in 2017. Around the globe, WeWork has upward of 400 locations in 27 countries, compared with one in 2010.
It is unknown how much autonomy or power Mr. Jacobs will have as the only WeWork executive solely dedicated to Canada. But his hire is the latest example of WeWork’s initiatives to bolster its business, amid questions about its US$47-billion valuation and ability to turn a profit.
The Globe and Mail first reported in March that the company had hired another local real estate executive, Chris Bonneville, to help bolster relations with the Toronto real estate industry. Mr. Bonneville will report to Mr. Jacobs.
Mr. Jacobs’s job is to expand WeWork across Canada, by finding properties to lease, negotiating leases with landlords and overseeing the renovations of the space into a WeWork location.
“There was no one doing the role before," Mr. Jacobs said. "Canada had been divided up into east and west, and there were people running real estate on the west side and people running real estate on the East Coast. But no one was specifically focused in on the Canadian market,” he said.
In addition to Toronto, WeWork has Canadian locations in Montreal and Vancouver. On Monday, WeWork confirmed that it was expanding into Calgary this year with two locations. Mr. Jacobs, who officially started about a week ago, said he is evaluating new markets such as Kitchener-Waterloo, Ottawa and Edmonton.
When asked whether his job included buying real estate for WeWork, Mr. Jacobs said that is not part of the mandate right now. (WeWork has bought property in the United States.)
Although Mr. Jacobs is in charge of real estate development across Canada, he will not oversee the WeWork locations once they are running.
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That will continue to be overseen by WeWork executives in Seattle and Boston. The Seattle general manager oversees Vancouver and other U.S. West Coast cities. Similarly, a Boston-based executive is in charge of the Toronto, Montreal and Boston locations.
Mr. Jacobs joined Allied in the early 1990s and helped take the trust public in 2003. He served as Allied’s executive vice-president of acquisitions and asset management, working with Allied founder Michael Emory to acquire and refurbish a string of derelict industrial spaces in Toronto’s west end. Those retrofitted properties are now some of the most coveted office spaces in the city.
After leaving Allied in 2015, Mr. Jacobs spent about a year working for a Vancouver-based private equity firm that specialized in second-tier U.S. office properties. He then spent about three years running his own real estate consulting company.
WeWork now falls under the We Company umbrella, which also includes short-term apartment rentals and early education.
The real estate industry has complained about WeWork’s convoluted lease process, which requires multiple approvals from various divisions within WeWork.
WeWork is finding ways to become more flexible with its contracts, including brokering revenue-sharing leases with landlords.
Under a traditional WeWork contract, the company will enter into a long-term lease with a property owner and sublease the refurbished space at a higher price to pocket the difference.
Rachelle Younglai