With questionable planning and operations, the global coworking company WeWork has been accumulating a series of setbacks since 2019. The company is in the process of recovery, seeking to regain the trust of investors and the market. Nevertheless, this historic and structural crisis has raised alarms about the current coworking scenario in Brazil.

In conversations with industry analysts, it’s evident that WeWork is experiencing a crisis alone. According to Tiago Alves, CEO of Regus, the market has not truly declined in recent years. Even post-COVID-19 pandemic, the sector appears to be growing, especially as companies return to a 100% in-person model like Amazon or adopt a hybrid system. The reality is that more and more organizations may find a need for coworking spaces.

“The market is growing. The current concern is that we have one operator in crisis, which expanded rapidly in Brazil and is now facing issues like unpaid rents. I understand the apprehension of many landlords due to WeWork's situation, but the market is doing well,” emphasizes the expert.

• Read more: The WeWork crisis: major landlords and real estate funds under pressure

Alves believes that WeWork’s origins in New York, USA, led to a lack of understanding of the regulated market in Brazil. In his analysis, not everything that works abroad is guaranteed to succeed on Brazilian soil.

“The accelerated and somewhat reckless growth regarding their square footage in Brazil resulted in high costs. With increased expenses, it becomes difficult to maintain the business, leading to various problems like WeWork is currently facing, including eviction orders,” the executive analyzes.

The company’s series of issues began in January 2019 in New Jersey, USA, when its bankruptcy filing became public. The company’s stock plummeted, and its value fell to under R$245 million (US$50 million).

In Brazil, the situation mirrored that of the U.S., revealing that the management style from the U.S. extended to Latin America. The Santander Renda de Aluguéis (SARE11) Real Estate Investment Fund had reported in June, as shown in REsource, that the company was defaulting in the country. Now, WeWork is accumulating debts and eviction notices.

According to monitoring by SiiLA, which covers cities like São Paulo, Rio de Janeiro, Belo Horizonte, Brasília, Campinas, Curitiba and Porto Alegre, WeWork currently accounts for 47% of the coworking market share in Brazil.