Short term, direct leases scare thee crap out of institutional landlords. It impacts the surety of the building's income stream, which is reflected in the assets' "cap rate" and therefore valuation.
Also, due to protracted lease negotiations and brokerage model (both tenant and landlord brokers get paid based on the total lease payments), there isn't motivation for shorter term leases. Just ask anyone who has a small lease requirement that is in a stable, non-VC backed company -- no tenant rep broker wants to take this work on because there is no money in that transaction, there's not that much less work than required vs a larger lease requirement, and no promise of a bigger deal with that company down the road in case they become the next Dropbox....
So 3 out of the 4 involved parties are not motivated to shorten lease term. The only one who wants shorter leases are the tenant.
So what's to stop a local real-estate investor, or twenty investors, from leasing ten office buildings in downtown Seattle long term and then subletting them short term?
Where is the WeWork moat? Buildout? Reception clerk? Meeting room reservation software? Demand forecast?
At some point the VCs will stop pouring money into it, WeWork will have to charge the full price, and then any old group of people with money can build a local WeWork clone. And unlike WeWork they won't be saddled with expectations of paying a return on the multi-billion investment spent on subsidies.
One useful thing about WeWork is I can drop into any location in the world several times a month and I'm already set up, I just point and click, and I'm ready to go.
Croissant is an interesting aggregator that does this across smaller coworking spaces, but does require you spend some time getting set up each time you use a new space.
Then why bother getting a coworking space at all? Yet many do... The experience is night-and-day different... sure WeWork is more expensive than Starbucks (it costs about 5 Starbucks drinks a day), but the productivity difference is worth it.
I could see some defenses of WeWork, but surely not productivity!
Having worked in a company fully based in a WeWork location in Boston, I can tell you WeWork basically is a complete stereotype of precisely all of the miserable, distraction-focused problems with open plan offices in general.
For fun meetups and goofing around, they are nice spaces.
For getting work done, it’s horrible, universally. People on my team would actively leave the WeWork office and walk to Starbucks to get work done, or more often just constantly work from home.
Whatever VC <-> founder winking social signaling and sort of cookie cutter “look at how start-uppy and innovative we are” status signaling must be the driver of locating in WeWork and coworking spaces generally.
It is clearly not related to productivity, quiet or private conditions conducive to engineering work, or basic workplace ergonomy or cognitive health.
Also, due to protracted lease negotiations and brokerage model (both tenant and landlord brokers get paid based on the total lease payments), there isn't motivation for shorter term leases. Just ask anyone who has a small lease requirement that is in a stable, non-VC backed company -- no tenant rep broker wants to take this work on because there is no money in that transaction, there's not that much less work than required vs a larger lease requirement, and no promise of a bigger deal with that company down the road in case they become the next Dropbox....
So 3 out of the 4 involved parties are not motivated to shorten lease term. The only one who wants shorter leases are the tenant.