"The story of WeWork’s mysterious first investor"

A major piece from the property mavens at The Real Deal:

Brooklyn investor Joel Schreiber made a killing buying into Adam Neumann’s company early, but some critics accuse him of cheating them on deals

In 2010, WeWork’s Miguel McKelvey and Adam Neumann were two unknown entrepreneurs scouting buildings for their first co-working space. They set their eyes on a Canal Street property, but when they contacted the landlord, he balked. 

Instead, the building’s owner offered a meeting with an acquaintance who, he said, might be interested: Joel Schreiber, an obscure Hasidic real estate investor living in Brooklyn.

“This guy shows up in the meeting, sits down, doesn’t really speak to us, doesn’t shake hands,” McKelvey recalled during a June interview with the NPR podcast “How I Built This.” “These are like Orthodox Jewish guys, you know, wearing the black suit and stuff, so to me as an Oregonian, I don’t really know the world too well. But Adam felt really comfortable with it by then.”

Not long after the meeting was over, Schreiber called the WeWork co-founders. He didn’t have a suitable building, but he had another proposal: He wanted to invest in their company. Neumann and McKelvey hesitated. They already had some money from the recent sale of another co-working venture called Green Desk and wanted to do their own thing.

But Schreiber persisted. “Whatever it takes, I want to be a partner with you,” he said, according to McKelvey. “And so we were like, why not? Let’s throw out a number, and we’ll make it outrageous,” he recalled. “There’s no chance he’ll say yes, but if he does, then hey, we’re fine.”

Neumann and McKelvey reportedly offered Schreiber a third of the company for $15 million, and he accepted. Though McKelvey did not name Schreiber in the podcast, a spokesperson for Schreiber’s firm, Waterbridge Capital, confirmed to The Real Deal that he was WeWork’s first investor, noting that he “provided seed capital to open the first few locations” during its startup phase.

In McKelvey’s telling, the deal was a pivotal moment for what would become the world’s most valuable co-working company. WeWork went on to raise another $6.1 billion over the next seven years and garnered a $20 billion valuation in July 2017. Representatives for the company declined to comment for this story.

Into the spotlight

Now, as WeWork prepares for a rumored blockbuster IPO, its secretive first investor is being thrust into the spotlight. The sudden attention is a big change for Schreiber, who has kept a very low profile within the tight-knit and media-shy community of Brooklyn’s Hasidic property moguls. 

Despite his being a key player in several big New York real estate deals — including Williamsburg’s first Apple store and the $481 million trade of the Long Island City office tower One Court Square — finding a photo of Schreiber online is virtually impossible. Even partners who spent years working with him say they know little about the man.

“He likes to be very secretive,” said Ira Zlotowitz, president of the commercial mortgage brokerage Eastern Union Funding, who has helped negotiate debt deals on behalf of Waterbridge. “He’s very below the radar.”

Schreiber, who did not respond to several requests for an interview, would clearly like to keep it that way. One of his allies in the real estate business called TRD last month anonymously, asking what kind of offer it would take to kill this profile. We refused to engage....MUCH MORE