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- Sandeep Mathrani, WeWork’s incoming CEO, starts on February 18. To understand how he will likely lead the struggling coworking giant, we talked with six executives at his former company, GGP.
- Mathrani started at mall company GGP after his predecessors laid the foundation for a major turnaround, and he continued the plan with his operating expertise.
- WeWork wasn’t his first stop after working at GGP’s parent company – instead, he was set to be a consultant for private-equity giant Starwood Capital Group’s retail arm, in a role sources told us was announced to investors in early January.
- Former GGP executives say Mathrani is nearly the opposite of WeWork founder Adam Neumann: He has a keen eye for detail and numbers and avoids drinking at work.
- Click here for more stories about WeWork.
WeWork’s incoming chief executive may be the antithesis of Adam Neumann, the coworking giant’s cofounder and former CEO whose swirling charisma was at the center of an IPO implosion.
Sandeep Mathrani, who spent years at a publicly traded mall company, doesn’t like to drink with his colleagues after work or play ping pong in the office in the afternoon, former coworkers said. The engineer turned real estate executive is more likely to be found interrogating colleagues about their data in presentations, and has a knack for cutting operational costs.
“He’s a charismatic leader who cares deeply for the people he works with. and those that rely upon him,” said Daniel Hurwitz, who was the lead director for GGP during Mathrani’s tenure and has known him for 20 years. “While his creativity is clearly a core strength, he’s a practical leader who understands how to direct a company appropriately given the situation that it faces.”
The former CEO of Chicago-based mall owner GGP has been credited with turning around the business, which emerged from bankruptcy the month before he started in 2010 and, in 2018, was sold to Brookfield for $15 billion. Insiders say he’s likely to take a hands-on approach to even the smallest details at WeWork — which currently has two open slots in the top exec ranks.
A WeWork spokeswoman declined to comment on behalf of the company and Mathrani.
To better understand Mathrani, who joins WeWork officially on February 18, Business Insider spoke with a half-dozen executives at his former company, mall giant GGP. They largely spoke on background because of nondisclosure agreements they have signed. All said that Mathrani is a strong leader with a good track record of operational expertise.
While the easy narrative is seeing Mathrani as the mall turnaround expert brought in to apply similar magic to overhaul an ailing WeWork, most of the insiders we talked to also credited Mathrani’s predecessors for the company’s salvation, saying Mathrani continued to steer the ship on the path they set out and eked out gains along the way.
“I’ve had plenty of opportunities and plenty of luck,” Mathrani himself said last year during an acceptance speech for a real-estate industry award.
Mathrani’s time at GGP offers a window into how he may guide WeWork, which SoftBank leadership has already started restructuring.
SoftBank orchestrated an October bailout at WeWork followed by mass layoffs, firings of employees who abused vendor policies, new leadership, selling off noncore assets, a six-pillar plan, changing compensation, getting rid of free beer on tap, and, most recently, a board refresh.
“We hired a leader — a great leader who’s done one of the most amazing turnarounds in the retail industry, which is GGP,” WeWork chairman Marcelo Claure said in a CNBC interview on Monday. “He took it from bankruptcy and sold it for tens of billions of dollars to Brookfield. That was a transformational leader, and the company has a great culture. They had to do a lot of innovation in order to transform that retail business. It is a very similar play here.”
Based on the most recent financials available to the public, WeWork has a long way to go to reach profitability. The company lost $1.3 billion in the third quarter alone, per financials reviewed by Business Insider.
While there may be some safety net for WeWork in the form of a SoftBank bailout, the Japanese tech conglomerate itself has become the target of an activist investor, who is agitating for changes in corporate governance.
Now, Mathrani will need to convince WeWork’s various stakeholders that the company is headed for stability and, eventually, profit.
‘His Rolodex is second to none’
Mathrani was born to a wealthy family in India and moved to the United States to finish high school after a brief stint at prestigious British school Eton. He started his career designing wastewater plants, but a profitable investment in a Washington, DC apartment convinced him to switch career paths. He worked in retail real estate, eventually rising to an executive vice president position at Vornado Realty, the office and retail real estate company founded by industry giant Steve Roth.
Mathrani joined General Growth Properties in December 2010 as the mall company’s third-choice CEO, three sources with knowledge of the decision said. Real estate veterans Adam Metz and Tom Nolan, with input from activist investor Bill Ackman, had just finished 2-1/2 years walking the company through bankruptcy and recapitalization. Before the duo came in, GGP had been the largest borrower of commercial mortgage-backed securities in the US market, putting it in a precarious position when the global financial crisis dried up loan issuances.
Metz and Nolan’s plan was to split up GGP, keeping the better malls and spinning out non-core assets, both before and after Mathrani joined. Those assets became companies like Howard Hughes, a publicly traded developer of master-planned communities.
Investment giant Brookfield, which owned a third of GGP’s stock when it emerged from bankruptcy, planned to buy the full company in a few years if its stock was still trading below what it thought it was valued. In 2018, Brookfield took the company private, giving Mathrani a payday worth up to $189 million.
“In reality the car was built; he just drove it out of the factory,” says one former GGP executive who worked directly with Mathrani. “He did a good job operating GGP with the security of knowing Brookfield was his safety net – he always had Brookfield behind him.”
At GGP, Mathrani focused on executing the plan set by his predecessors and streamlining the company’s operations. Like WeWork’s recent effort to outsource 1,000 janitors, Mathrani worked to cut headcount significantly through externalizing roles, including mall maintenance.
He brought a wide network to GGP and made even more contacts in all corners of real estate and investing during his nine-year tenure. On a GGP roadshow, he met billionaire casino magnate Sheldon Adelson; one executive recalls Mathrani speaking with billionaire mall owner David Simon on the phone “multiple times a week.”
“He has deep relationships at investment banks, at traditional life insurance companies, pension funds, CMBS dealers,” the source said. “His ability to source financing is amazing. His Rolodex is second to none.”
After Brookfield took GGP private in 2018, Mathrani became the CEO of Brookfield’s retail arm before officially announcing his departure last month.
But WeWork wasn’t Mathrani’s planned first move post-Brookfield; instead, he had set up a consulting firm. One of his clients was Starwood Capital Group’s retail arm, which owns Class B malls, three sources said. The private-equity firm had emailed investors in the first week of January to announce the retail expert’s appointment as a consultant.
A spokesman for Starwood declined to comment.
A foil to WeWork’s founder
Instead of Starwood, Mathrani is heading to an even bigger real estate turnaround play: WeWork. Much like GGP, which needed an operational guru, the company has been looking for someone with an eye for operational details.
All of the six executives with whom Business Insider spoke agreed 57-year-old Mathrani is a study in contrasts to Neumann. Mathrani makes data-driven decisions quickly and, as an engineer, will dig into every number presented to him.
Unlike Neumann, who founded a company that tried to go public with an all-male board and largely male leadership team, Mathrani said in an April 2019 speech that half of his direct reports were women.
Multiple sources characterized him as a frank, charismatic executive who has a temper but who doesn’t hold grudges. For his future WeWork colleagues, the sources recommended thick skin.
“I remember thinking two weeks in, ‘I’m 50 years old and I’m still getting yelled at,” said one executive who worked with him for years at GGP. “He’s not personally mad at you, he’s just emoting.”
Loyalty is one of Mathrani’s top values, and, like many new CEOs, he may look to replace top leadership at WeWork, perhaps with past lieutenants. The executive leadership team already has two open slots – chief financial officer and head of real estate – per a slide from a November all-staff meeting leaked to Business Insider. At GGP, Mathrani largely cleaned house when he started, said former executives.
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“When Sandeep came in, if you were there for a very long time, the assumption was you were overpaid and someone younger could do it faster and cheaper than you could,” said a former GGP executive who worked with him for years. “He is going to conduct basically an 18-month interview of the entire organization.”
That source said he expects Mathrani to do well shoring up WeWork’s revenues and negotiating liabilities with landlords. As of June 30, the company had $47 billion in long-term lease obligations. And the source said Mathrani will not, like Neumann, order cases of Don Julio 1942 for company events. In fact, even on trips with executives, he preferred to retire to his hotel room for more work instead of a nightcap with colleagues, two sources said.
And more than many real estate CEOs, he has an eye for detail, multiple sources said.
“He really got his hands dirty. He walked the malls all the time and would say to the operations guy, ‘you need to change out these lightbulbs’ or ‘hey, why don’t you try this kind of finish for the floor,'” said one source.
Mathrani has no shortage of opportunities to improve operations at WeWork. One 2011 interview with his alma mater gives an indication of how he approaches the CEO role, in which he highlights the importance of motivating teams rather than doing everything solo:
“You’re supposed to build, you’re supposed to develop, you’re supposed to lease. Really, you can’t do it. It’s too large. So you have to motivate, you have to lead.”
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