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As WeWork exits bankruptcy, they're building a new leadership team, replacing CEO David Tolley with John Santora. Tolley, who guided WeWork through bankruptcy and debt restructuring, is succeeded by Santora, a seasoned real estate veteran from Cushman & Wakefield. As discussed in today's email, Santora's experience and old-school work ethic signal a shift from WeWork's tech-focused branding to a more traditional office service provider approach, perhaps emphasizing enterprise clients in their go-forward strategy.

The real estate industry isn't bracing for the next crash; it's already here. Escalating costs, inflation, and interest rates are squeezing profits across all sectors. Immediate innovation and PropTech are essential. In a new article, we explore how data and technology can optimize operations, enhance tenant experiences, and introduce new revenue streams, ensuring resilience and growth amid economic uncertainty.

This week in Propmodo Technology, we explore energy management, discussing how outdated utility data systems are stalling the renewable energy revolution. We also examine how multifamily landlords are using technology, education, and rewards to help tenants reduce their energy use. And we delve into how a multifamily developer in Toronto saved $24,000 by installing EV chargers with load management—and how you can too.

Now, let's dig in!

What WeWork’s New CEO Means For Its Go-Forward Strategy

Now that WeWork is exiting bankruptcy, they are building a new leadership team. This week, they announced that John Santora would replace the current CEO, David Tolley. Some of you may recall that Tolley replaced former CEO Sandeep Mathrani back in October last year. At the time, I wrote an article about Tolley and speculated on what his appointment meant for the future of the co-working company. I noted, “The most troubling thing about the decision was that Tolley was the interim CEO. That gives the perception that they probably shopped the job around to other candidates during these last 6 months and did not find a taker… If he is a strategic decision, that would be a much better look for WeWork than if he was just the guy who got stuck with the job.”

WeWork reached out the next day and objected, stating there was “no basis for your speculation.” They emphasized Tolley's value as head of the company: “Since becoming interim CEO in May, David’s fresh perspective, extensive experience, and strategic leadership have brought immense value to the company. The Board is fully confident in his ability to drive WeWork’s continued transformation as we build a stronger and more profitable company that is positioned to invest in our offerings and member experience,” a spokesperson wrote.

Now it seems that “drive WeWork’s continued transformation” primarily meant guiding them through the bankruptcy process. In this respect, Tolley did an excellent job, helping WeWork drastically lower its lease liability and restructure its debt to the tune of $4 billion. But, as WeWork faces the challenge of growing back into a valuable company, Tolley appears not to be the right person for that job.

Instead, they have chosen Santora, who has a long career in commercial real estate, almost exclusively at Cushman & Wakefield, where he worked for over 45 years. He was COO of the firm and later the President and CEO of the Americas and head of the Tri-State Region. Santora is known for his old-school work ethic, something crucial for his new role. “Nobody’s worked harder, done more and has probably given up their lives for this company,” said Shawn Mobley, Cushman’s then-CEO of the Americas. Santora was known for working long hours, from 6 am to 8 pm at times, so he might not champion remote work like former CEO Adam Neumann.

Santora’s extensive experience in occupier services could highlight the importance of enterprise clients to WeWork’s strategy. But, he admits he is not the most technologically savvy executive. “I started in 1977; we didn't have fax machines or cellphones. At one point, I had a beeper, but all it did was beep. I had to find a pay phone and call my secretary,” he said in a previous interview. His LinkedIn profile still shows him in his former role at Cushman.

CEOs often set the tone for the rest of the company. By choosing someone as rooted in commercial real estate as John Santora, WeWork may now view itself more as an office service provider and less as the disruptive tech company it branded itself under Neumann.

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