Who Is Yardi — And What Does It Want With WeWork?
Yardi Systems spent the past 40 years quietly growing into a giant in the real estate software industry, but it's far from a household name.
It's about to own one.
When WeWork's attorneys revealed in court on Monday that Yardi would become the majority owner of the beleaguered coworking company after providing it most of the money it needs to exit bankruptcy, the arrangement seemed to come out of left field to players in the coworking and real estate technology sectors.
But, with a few days to digest it, those experts told Bisnow the acquisition makes complete sense in a world in which commercial real estate and data are increasingly intertwined.
“My reaction was, this is fucking brilliant,” said Michael Beckerman, founder of proptech industry association CREtech. “Because the office market is in such a state of transformation, transition and turmoil … it’s like, holy shit. Something big is coming out of this. No doubt.”
While Yardi's ultimate vision for the coworking firm is unclear, the potential to incorporate its vast troves of data, maintain control over the technology platform it built in partnership with WeWork and acquire a coworking leader and global brand in one fell swoop is a tantalizing prospect.
Office landlords who have been dealing with the chaos of WeWork's meteoric rise and fall are also likely to view the deal as good news since Yardi is seen as a steady and mature company — “the total polar opposite” to former WeWork CEO Adam Neumann, said Fronteras Commercial Real Estate President Giovanni Palavicini.
“Across the industry, I can tell you most people are excited,” he said.
Under a restructuring proposal revealed on Monday, Yardi is expected to take a 60% stake in a private WeWork after injecting the coworking giant with $337M of the $450M the company needs to exit bankruptcy. If approved by the bankruptcy court, Yardi will take over operations of a much smaller WeWork, the bruised if not iconic name in the coworking world, and operate it as an arm's-length subsidiary.
“As a leading global provider of software and software services for commercial and residential property owners, Yardi is committed to supporting the long-term success of WeWork and the co-working industry,” Yardi said in a statement this week.
The move by Yardi — which operates subsidiaries like CommercialEdge, RentCafe and Multi-Housing News — to purchase WeWork is its most high-profile move since Anant Yardi created a rental software platform in 1982 for an Apple II computer.
“At first I was like, ‘Wow. This is cool,’” said Dror Poleg, a workplace consultant and strategist. “It feels like a strange marriage. A loud frivolous brand on the one extreme, and on the other is a reliable software company. But when you think about it, you see the rationale of the bet.”
‘Thank Goodness It's Them’
When Anant Yardi founded Yardi Systems, he was just let go from the Burroughs Corp., the forerunner of Unisys. At the time, Yardi and some partners had invested in rental properties in California, and Yardi decided to create and market property management software as a business, he said during a 2017 podcast interview.
Yardi began selling the program for around $400 back in the 1980s, gradually scaling his company. Revenues grew from $200K in 1984 to $1M by 1987, Yardi said during the interview. Then, the firm switched from just selling software to becoming a software as a service company, which meant recurring revenues.
In recent years, Yardi said the company regularly posted 15% to 20% annual revenue growth. As of 2017, the firm had 5,500 employees in 30 global offices with 5,000 customers, he said. Today, that number has grown to 9,000 employees across 40 offices, according to the company's website.
A Yardi Systems spokesperson declined to comment for this article.
Despite its size and presence in the market, Yardi has largely remained under the radar, although it's well-known in real estate and proptech circles.
“Yardi is a really, really respected brand. I think there was a giant sigh of relief when our industry saw it was Yardi. First it was like, ‘Wait. What?’ Then it was, ‘Oh, thank goodness it’s them,’” Beckerman said. “They’re not a company that brags and pounds their chest. They quietly just grow year-over-year.”
Despite the size of his company, Anant Yardi has flown far under the radar, rarely giving interviews or making appearances. The podcast episode offered one of the best glimpses into his personality and business philosophy.
He said he learned early in his career that it was not only important to accomplish what he was asked to do but also to gain “perspective in terms of industry, in terms of enterprise and in terms of the strategic direction” in order to add value to a company.
“So often we are wrapped up in things that pertain to us,” Yardi said in 2017. “It’s so much better if you look at things from the other person’s point of view, where you’re trying to understand where the other parties are coming from and where you can provide value.”
Yardi also said he values respecting all his employees, accommodating what people need and not being afraid to fail. Those in the industry marveled at the tenure of its leadership team, and Yardi attributed the company's track record of attrition to a family-friendly culture and patience with mistakes.
Yardi was among Glassdoor’s highest-rated CEOs in 2017.
“Try things. If you fail, don’t be too upset about it,” he said during the podcast. “If one door closes, there’s probably another door that’s opening.”
He also is involved in philanthropic efforts, including donating $10M in 2021 to the School of Artificial Intelligence at the Indian Institute of Technology in Delhi, giving $1M for earthquake recovery efforts in Turkey and Syria, and $320K to Farmington State College in New York to provide eight students with an annual scholarship in 2023.
All of the industry players who spoke to Bisnow highlighted how stark the contrast is between Yardi and Neumann. DGIM Law founding partner Daniel Gielchinsky, a bankruptcy attorney who has been following WeWork's restructuring closely, said many in the real estate industry “breathed a sigh of relief” when the bankruptcy judge overruled Neumann’s objections to the sale to Yardi.
“The industry kind of knows that Adam Neumann, on his first go-round, treated WeWork like his own pocketbook,” Gielchinsky said. “I think Adam Neumann would have brought back all that baggage to WeWork and would have created a lot of skepticism.”
Palavacini, who is also co-president of the Global Workspace Association, expects that WeWork will become a more conservative, thrifty company under its new majority owner.
“Yardi has an incredible track record, so there’s already rapport built [with landlords],” Palavicini said. “Whether they use Yardi or not, everybody knows who Yardi is.”
Jamie Hodari, the CEO of Industrious, one of WeWork's biggest competitors, praised the move in a recent LinkedIn post, saying Yardi will be a helpful voice as the company enters the final stretch of its restructuring.
“In the interactions I’ve had with Anant Yardi, I’ve found him to be measured, thoughtful, even erudite, but still quite bold,” Hodari wrote. “Like if Elon Musk unexpectedly had Jimmy Carter’s personality.”
The Devil Is In The Data
WeWork estimated in financial projections filed in bankruptcy court that it could turn its first profit in 2025 and raise occupancy every year without increasing expenses.
The company expects net licensing fees, or how it categorizes its subleases to companies taking office space, to grow from $1B this year to $2.1B by 2028 while growing revenues per square foot from $81.1M to $98.9M during that period.
It projected its occupancy will rise from less than 76% this year to 85% by 2028, while at the same time shrinking the number of locations from 335 to 329.
In court filings, Neumann slammed those projections as “overly optimistic” because they “can’t be reconciled with [WeWork’s] historic performance,” adding that the projections are “unsustainable in light of the razor-thin margin for error.”
Neumann wrote that he and his backers offered to buy WeWork for $650M and provide debtor-in-possession financing of up to $250M.
“If these unrealistic projections fail to materialize, [WeWork is] likely to find [itself] undercapitalized and cash-flow negative in the not-too-distance future, which could result in a return of WeWork to Chapter 11,” Neumann wrote in the filing.
But Gielchinsky said the company's projections are achievable with the effort WeWork has done to reject and restructure its leases — it estimates it has saved $8B in future rent payments through its rightsizing efforts — if it offers lower prices as a stable operator.
“Whenever you have a Chapter 11 debtor, you’re going to put forward projections of a story you want to tell. But I think they’re reasonable,” Gielchinsky said. “I think the company did a good job here renegotiating the leases that were potentially profitable so this company emerges with a healthy balance sheet and more than a prospect of long-term success.”
Thrive Coworking CEO Ramon Gonzalez told Bisnow he is relieved that Neumann failed in his bid to gain back WeWork as the company’s massive fall from grace has created “sort of a black cloud” over the coworking industry. But under new leadership, he said WeWork will likely continue to be one of the industry's leaders, despite the baggage.
“They absolutely can compete. Their name is synonymous with coworking,” Gonzalez said. “The marketplace is forgiving. The marketplace is forgetful. With sound leadership over time, a lot of this stuff will be in the past.”
Yardi already has intimate knowledge of WeWork's business. It partnered with the coworking firm in 2022 to develop the WeWork Workplace app, then invested in a 2023 debt restructuring as the company was veering toward insolvency.
The company also operates a software management platform for other coworking operators called Kube.
Yardi taking the majority stake in WeWork likely means its efforts and work on the WeWork platform won’t now fall into the hands of another bidder, said Scott Robinson, the director of the REIT Center at New York University’s Schack Institute of Real Estate.
“WeWork has always tried to pitch that it's some sort of tech play, but nobody really saw that,” Robinson said. “They thought they just sprinkled the Silicon Valley fairy dust on them.”
But Yardi’s partnership brings that idea closer to reality while giving the company a chance to grow its customer base and brand recognition, Robinson said.
“I could expand my tech outside of the WeWork into other enterprises. Could I offer this technology to other office management platforms? Could I offer it to other property owners? So there could be other revenue streams outside of that WeWork footprint.”
Yardi also comes to the table with decades of data and expertise in analyzing it. That information is fuel to coworking’s fire, Gonzalez said. Coworking operators are increasingly relying on data and analysis to control spending, gain new customers and grow revenue.
“You've got to be increasingly efficient at delivering space, and you've got to be really, really familiar with your customers,” Gonzalez said.
As offices become more networked and connected, software is becoming more critical to both landlords and tenants, Poleg wrote in a recent post on X. But collecting and utilizing that data becomes a “major headache that someone else needs to handle.”
“Once upon a time, I wrote a book that predicted that one day, the office world would have its own Hilton and Marriott — consumer brands that partner with investors and owners to make buildings attractive and accessible,” Poleg wrote. “I always thought WeWork was the prime candidate for becoming that brand. In Yardi's hands, WeWork has a new opportunity to fulfill its destiny.”
CORRECTION, MAY 3, 11 A.M. ET: Giovanni Palavicini left Avison Young last year and is now president of Fronteras Commercial Real Estate. A previous version of this article misidentified his current employer. This story has been updated.
