WeWork announced on Wednesday that it will launch a new real-estate investment platform called Ark. The platform will allow users to buy and develop commercial properties around the world, according to Reuters.
Ark will have an initial investment of about USD 2.9 Billion, with USD 1 Billion from Ivanhoé Cambridge, a unit of Canada-based investor, CDPQ.
Ark will take on a portfolio of buildings based in New York, totaling up to USD 1.8 Billion, such as the former Lord & Taylor department store, which were owned by WeWork Property Advisors.
WeWork’s decision to acquire and manage property itself is a departure for the Company. WeWork has primarily focused on solely renting offices spaces to small startups, rather than owning then.
WeWork was valued at approximately USD 47 Billion in a private funding raising round in January. The Company is backed by large investment funds such as SoftBank and Softbank Vision Fund. However, the companies have noted that they will not continue to invest billions into WeWork due to its losses.
WeWork’s move comes months after its parent company, The We Company filed its initial public offering papers confidentially with the U.S. Securities and Exchange Commission.
Following Uber Technologies, Inc. (NYSE: UBER) IPO, WeWork is expected to be the next largest tech IPO this year. Other companies such as Lyft, Inc. (NASDAQ: LYFT), Pinterest, Inc. (NYSE: PINS), and Zoom Video Communications, Inc. (NASDAQ: ZM) also went public this year.
However, Uber and Lyft have had a shaky start to their IPO largely because of their losses. Both ride hailing service companies are well below their IPO values.
Lyft’s shares traded as high as USD 78 per share on its IPO launch. Leading into Wednesday morning, Lyft shares were trading at USD 50.20 per share. Uber shares reach as high as USD 44 per share on IPO launch, however, shares edged as low as USD 36 per share just days after.
Similar to Lyft and Uber, WeWork is also reporting significant losses. In fiscal 2018, WeWork reported losses of USD 1.93 Billion and revenue of USD 1.82 Billion.