WeWork gets $2B after SoftBank cuts planned investment

WeWork announced on Tuesday that Japan's SoftBank raised its stake in the company by $2 billion.

That brings Softbank’s recent investment in the shared-workspace provider to $6 billion, WeWork said in a statement.

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The investment is reportedly below the $20 billion in funding the two companies had recently discussed.

SoftBank Chief Executive Masayoshi Son cut the size of the investment after his company's stock tumbled in last month's global stock market turmoil, according to a Reuters report.

WeWork also announced plans to operate under a new name, The We Company, which will run separate business units that lease commercial office space, rent out residences and run schools.

The reduced investment leaves WeWork with $1 billion to buy shares from existing investors and means Softbank will not gain majority control, said a person, who was not authorized to discuss the negotiations between the two firms.

Demand for flexible office space has steadily grown over the past decade, rising to about 11 percent of all leasing in the New York City borough of Manhattan last year from about 3 percent several years ago, according to brokerage Colliers International.

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In  October 2017, WeWork bought the Lord & Taylor Building on Fifth Avenue in Midtown Manhattan from the Hudson’s Bay Co. for $850 million, with plans to make the building WeWork's headquarters.