Neumann says only two things are holding his company back: "Cash," he says, pausing for a beat of suspense, "and space." In addition to SoftBank tightening its spigot, some buildings with WeWork as a major tenant have had trouble getting bank loans. And some landlords have grown leery of leasing much more space to Neumann, afraid of what terms he might be able to negotiate. He says alternative sources of funding and real estate can pick up the slack.

Now, after more than a year of planning, WeWork is creating an investment fund that aims to raise billions of dollars to buy stakes in buildings where it will be a major tenant. If all goes according to plan, the fund, called ARK, will start with $2.9 billion, including $1 billion from Canadian real estate investor IvanhoƩ Cambridge Inc. WeWork has long said it mostly stuck to leasing space because it believed in being "asset-light." Now it's wagering that buildings become more valuable with WeWorks in them, in which case ARK will put more of that added value back in the company's own pocket.

The fund's pitch to investors revolves around the relative safety of a real estate play with a large tenant in hand. It also depends on a gut-level faith in WeWork's vibes. Sylvain Fortier, IvanhoƩ Cambridge's chief investment and innovation officer, says the company's strength is what he calls a "recipe." "People actually want to be in the office, actually want to be together. They feel a little bit like home," Fortier says. "I bet you that sooner rather than later, a WeWork-branded building will be attracting other tenants the same way you will never have a vacant space next to an Apple Store."


ARK won't exactly put to rest concerns about conflicts of interest. "The question will be, what happens when the interests of the limited partners diverge from the interest of WeWork?" says Charles Elson, a corporate governance professor at the University of Delaware. "The more complicated structures someone comes up with, the more difficult it is to explain."

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