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WeWork founder Adam Neumann drums up major interest in mystery real estate venture Flow

Ousted WeWork founder Adam Neumann has drummed up major interest in his mystery real estate venture, securing $350 million in funding from Silicon Valley investors, valuing the company at $1 billion before it even opens its doors.

Neumann, 43, has said over the past few months he plans to create a widely-recognizable apartment brand stacked with community features to lure in the same kind of young professionals who have taken advantage of WeWork’s co-working spaces.

Still, not much is known about his plans for Flow, which is set to debut in cities like Atlanta, Miami and Nashville next year. A website for the project just says: ‘Live life in Flow. Coming 2023.’

But despite the public vagueness of the project, Flow has already generated a lot of interest, with Andreessen Horowitz, a prominent Silicon Valley venture capital firm that was an early investor in Facebook and Airbnb, valuing it at $1 billion.

The firm has now invested about $350 million into the company — the largest individual check it has ever written in a round of funding to a corporation, the New York Times reports.

Venture capitalist Marc Andreeseen praised Neumann in a blog post on Monday morning as a ‘vionsary leader’. He added that for all the scrutiny facing Neumann after his failed IPO and questionable management style, ‘it’s often under appreciated that only one person has fundamentally redesigned the office experience …  Adam Neumann’. 

‘We are thrilled by the scope and aspiration of this project,’ Andreessen said in the post.

‘It is not lacking in vision or ambition, but only projects with such lofty goals have a chance at changing the world.’ 

Adam Neumann, 43, has said over the past few months he plans to create a widely-recognizable apartment brand stacked with community features to lure in the same kind of young professionals who have taken advantage of WeWork’s co-working spaces

Still, not much is known about Flow, which is set to launch in several major cities next year

Still, not much is known about Flow, which is set to launch in several major cities next year

In explaining the investment firm’s decision to invest in the company, partner Marc Andreessen hailed Neumann as the person who could fix the current issues with the housing industry.

‘The demographic trends driving America’s housing market are impossible to ignore: Our country is creating households faster than we’re building houses,’ he wrote in a statement.

‘Structural shortages in available homes for sale push housing prices higher, while young people are staying single for longer and increasingly concentrating in highly desirable urban centers.’ 

And as a result of COVID, Andreessen wrote, ‘Many people will live in places far away from where they work, and many more will shift to a hybrid environment.’

‘Many people are voting with their feet and moving away from traditional economic hub cities to different cities, towns or rural areas with no diminishment of economic opportunity,’ he continued.

‘The residential real estate world needs to address these changing dynamics. And yet, virtually no aspect of the modern housing market is ready for these changes.’

He also sugggested that tenants in Flow’s living spaces will be able to earn equity – although, it’s unclear how that will work.

He went on to note that ‘for Adam, the successes and lessons are plenty,’ suggesting that as a repeat-founder he will ‘build on past successes by growing from lessons learned.’

‘We think it is natural that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes.

‘Residential real estate — the world’s largest asset class — is ready for exactly this change,’ Andreessen noted. 

Andreessen Horowitz has now invested $350 million into the company, and venture capitalist Marc Andreessen (pictured) is now expected to serve on its board

Andreessen Horowitz has now invested $350 million into the company, and venture capitalist Marc Andreessen (pictured) is now expected to serve on its board

‘In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community and genuine ownership has transformative power for our society.

‘When you care for people at their home and provide them with a sense of physical and financial security, you empower them to do more and build things.

‘Solving this problem is key to increasing opportunity for everyone,’ Andreessen continued, adding: ‘Make no mistake, this kind of mission is a heavy lift.’

He also suggested that some people 

Andreessen is now expected to serve as a board member for the new venture. 

Neumann has bought up apartment complexes, like Stacks on Main in Nashville, Tennessee

Neumann has bought up apartment complexes, like Stacks on Main in Nashville, Tennessee

An entity tied to the Israeli businessman also owns Society Las Olas in Fort Lauderdale, Florida

Meanwhile, Neumann has been preparing for his second act by buying more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville.

Most of the real-estate holdings are new properties with more than 200 units and many amenities, the Wall Street Journal reported in January.

In Nashville, Tennessee, for example, Neumann bought Stacks on Main, a 268-unit property that features a saltwater pool, a dog park, a rooftop lounge and valet trash pickup.

Each apartment also comes equipped with a Nest thermostat, and is billed on Apartments.com as ‘the gateway to an East Nashville lifestyle without the crazy price tag.’ Rents at the apartment complex start at $1,390.

Meanwhile, in in Fort Lauderdale, Florida, an ‘entity tied to Neumann’ is Society Las Olas, a 639-unit apartment building that includes a co-working space, a putting green and a barber shop.

And in downtown Miami, Neumann signed a contract to buy a majority stake in the 444-unit Caoba apartment tower – valuing the property at roughly $220 million.

The property includes a swimming pool with cabana and towel service, an outdoor game lawn and a separate sunning lawn, as well as a clubroom with a fully-equipped kitchen, billiard, foosball and media area. 

Just a few blocks away, Neumann now owns the 387-unit Yard 8 Midtown apartment building, which seems to target millennials on its website with a pitch that says: ‘Home is a vibe. It’s something you feel in your soul. A vibration of belonging, of something new and of endless possibilities. That’s life at Yard 8 Midtown.’

The apartment complex features a swimming pool and sundeck, a clubhouse with an outdoor bar and a coffee bar.

The Israeli businessman has also reportedly invested in suburban apartments, where demand has grown over the past few years as people working remotely no longer have to commute to a city.

He holds stakes in a building in Decatur, Georgia, and another in Norwalk, Connecticut, according to the Journal.

Speaking about the recent acquisitions to the Journal, DJ Mauch, a partner in Neumann’s family office said:  

‘Since the spring of 2020, we have been excited about multifamily apartment living in vibrant cities where a new generation of young people increasingly are choosing to live, the kind of cities that are redefining the future of living.

‘We’re excited to play a role in that future.’

Another entity 'tied to Neumann' owns the 387-unit Yard 8 apartment building, which seems to target millennials on its website

Neumann also recently signed a contract to buy a majority stake in the 444-unit Caoba apartment tower - valuing the property at roughly $220 million

Other properties Neumann now owns include Yard 8 and the 444-unit Caoba apartment tower in Miami, Florida

But the venture comes as an attempt at a comeback for Neumann, who earned his riches as the co-founder of WeWork in 2010, raising more than $10 billion for a business once valued at $47 billion.  

In her book, Reeves Wiedeman described the described the oftentimes unhinged excesses of Neumann while at WeWork

In her book, Reeves Wiedeman described the described the oftentimes unhinged excesses of Neumann while at WeWork

In his heyday, Neumann also launched WeLive, which was planned as a network of buildings where people could rent rooms in shared, furnished apartments.

The company opened apartment buildings in New York and Virginia, but closed them down after Neumann was ousted from the company in 2019.

In public, Neumann would hawk a vison of happy millennials sharing a workspace, playing shuffleboard, drinking unlimited beer and basking in the neon light of kitschy motivational signs.

But despite the company’s utopian face, employees later characterized it as having a ‘cult-like’ environment, and called Neumann the ‘partyer in chief’ while describing his ‘tequila-fueled leadership style,’ which included smoking marijuana on private jets and trying to become immortal.

In one incident of excess, Neumann threw a three day party for 8,000 employees to celebrate the company’s $37 billion valuation. Lorde performed beatboxing workshops and lakeside meditation sessions, and the retreat even featured motivational speeches by Deepak Chopra.

Perhaps most notable was Neumann’s personal alcohol tab at the party, which consisted of 12 cases of Don Julio 1942 tequila that costs $140 for a single bottle, for him and his wife Rebekah. 

He also ordered 216 bottles of beer, 48 bottles of wine and two bottles of Highland Park’s 30-year-old single-malt Scotch whisky, that cost $1,000 each. 

And in her book Billion Dollar Loser: The Epic Rise and Fall of WeWork, Reeves Wiedeman described the oftentimes unhinged excesses of a man who walked through the office barefoot and would jump on people’s desks and conference tables and yell.

Neumann would blare music at party volumes and scream at anyone who asked for it to be turned down, ex-employees have claimed.

He demanded that cases of Don Julio 1942 tequila were at every office and would ‘lose his s***’ if they were not there.

According to the book, Neumann was often 'giving rousing speeches in the open atrium' with 'WeWork employees fawning over their boss as if they were disciples pledging fealty to a fiery preacher'

According to the book, Neumann was often ‘giving rousing speeches in the open atrium’ with ‘WeWork employees fawning over their boss as if they were disciples pledging fealty to a fiery preacher’

Neumann would also blare music at party volumes and scream at anyone who asked for it to be turned down, ex-employees have claimed

Neumann would also blare music at party volumes and scream at anyone who asked for it to be turned down, ex-employees have claimed

Staff said that he would schedule meetings for 2am and then turn up 45 minutes late.

Employees who quit say in the book it was like ‘escaping (cults like) Jonestown or Waco’ – and there were always new believers to take their place.   

Despite poor wages at WeWork angering staff, Neumann bragged about how little he paid his staff and insisted there they were supposed to use a ‘sense of purpose’ and free beer to pay their bills, the book says.

Eventually even WeWork tenants began to get fed up with this attitude, and when The Guardian moved into a WeWork space they found there were ‘constant celebrations’ that put them off.

Soon, a lack of diversity at the company started to gain national attention, and when a woman finally joined the engineering staff they had to rewrite the underlying code because they had described a reddish color in the design as ‘hooker’s blood’.

By 2018, Ruby Anaya, a former WeWork employee, filed a lawsuit saying she had been sexually harassed at company events.

She accused them of operating a ‘frat-boy culture’ that allowed alleged assaults like a male co-worker forcibly kissing her. She said in the suit she was fired in August 2018 in what she believes was an act of retaliation.

Neumann’s chief of staff, Medina Bardhi, also filed a complaint with the Equal Employment Opportunity Commission in New York in 2019, claiming that Neumann referred to her maternity leave as ‘vacation’ or ‘retirement’ and that she was repeatedly ‘derided and marginalized by Mr. Neumann and other WeWork officials,’ the New York Times previously reported 

By November, Neumann conceded in an interview that the company could have matured ‘sooner,’ saying, ‘We had a fun culture.’ 

Neumann was ultimately ousted from the company in 2019, after WeWork filed paperwork to set up a public offering, which exposed Neumann's embezzlement from the company

Neumann was ultimately ousted from the company in 2019, after WeWork filed paperwork to set up a public offering, which exposed Neumann’s embezzlement from the company

He made his money as the co-founder of WeWork, a communal working space, and was ousted from his position in 2019 - leaving with $200 million for consulting and other fees and nearly an 11 percent share in the company

He made his money as the co-founder of WeWork, a communal working space, and was ousted from his position in 2019 – leaving with $200 million for consulting and other fees and nearly an 11 percent share in the company

The dream finally came crashing down in 2019 when WeWork filed for its initial public offering which forced it to open up its finances to scrutiny.

That revealed huge black holes in its balance sheet and the company’s valuation plunged from $47 billion to $10 billion and the floatation was put on hold indefinitely. 

Neumann was ousted as his culpability for the company’s excesses were revealed, but only after majority owner SoftBank Group Corp. agreed to buy nearly $1 billion in stock from him. 

They also paid him $200 million for consulting and other fees.

To this day, Neumann still has an 11 percent share in WeWork, which is now valued at about $4 billion, and is worth $1.6 billion himself.

The meteoric rise and fall of WeWork: How office space company went from a ‘unicorn’ to a failing venture

Adam Neumann and business partner Miguel McKelvey opened the first WeWork location in New York City in 2010.

The idea was to make office work more of a collective experience, and the New York City space was rented out to freelancers, startups, and other businesses for months or years at a time.

By 2014, the company was valued at $4.6 billion, and major investors like JP Morgan Chase & Co, T. Rowe Price Associates, Wellington Management, and Goldman Sachs Group started to invest in the company.

But at the same time, Neumann started to revel in his newfound wealth, and started to spend money frivolously.

Skepticism soon started to mount about how the company could maintain its high value, but Japanese multinational conglomerate holding company SoftBank decided to take a risk in 2017 and invest $4.4 billion into the company, bringing its worth up to $20 billion.

By 2018, everything started to spiral, with employees speaking out about the working conditions at the company as Neumann buys his own private jet for $60 million.

Still, SoftBank decided to invest another $2 billion into WeWork, valuing it at $47 billion.

Then in August 2019, the company files paperwork to go public, detailing for the first time how Neumann had been charging the company for personal expenses.

The next month, WeWork executives announce they are postponing the IPO offering as they oust Neumann from the company and sell his private jet. 

SoftBank then agreed to buy nearly $1billion in stock from him and paid Neumann nearly $200 million for consulting and other fees. 

To this day, Neumann still has an 11 percent share in WeWork, which is now valued at about $4 billion, and is worth $1.6 billion himself.

Meanwhile, the company has started to regain ground.

In 2021, new CEO Sandeep Mathrani cut overhead costs by $1.1 billion and $400 million in operating expenses, improving WeWork’s free cash flow by $1.6 billion.

The company soon let go of 106 underperforming or yet-to-be opened branches and negotiates more than 100 lease amendments that provide WeWork with a $4 billion reduction in future lease payments.

At the same time, WeWork signed $850 million of lease contracts — the most it has had since its fall in 2019. 


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