In a recent interview with Insider, Jamie Hodari, the CEO of Industrious, a major competitor of WeWork, has suggested that WeWork's collapse signals the end of the era of massive coworking spaces adorned with extravagant amenities. Hodari believes that while some WeWork locations will transition to new operators after the company's bankruptcy, the oversized office blocks with luxurious features will become a thing of the past, potentially due to the high cost associated with renting them.

WeWork's bankruptcy filing on Monday comes after a prolonged period of financial difficulties. Despite previous efforts to downsize and renegotiate leases, the company still maintained an extensive real estate portfolio, boasting 777 locations as of June 30.

According to Hodari, in most cases, the assets of WeWork will simply change hands, with another provider or the landlord taking over the space. However, he noted that the exceptionally large WeWork spaces, ranging from 300,000 to 400,000 square feet, are simply too colossal for other companies to absorb.

"WeWork was the only provider in the sector that ever took on spaces that large," said Hodari.

Leasing these massive office buildings entirely proved to be a significant flaw in WeWork's strategy during its extravagant period, burdening the company with substantial liabilities, in Hodari's view. He attributes WeWork's woes to a go-go era where companies focused on revenue growth rather than profitability, making short-term decisions that may not have been prudent in the long run.

WeWork's massive coworking spaces, complete with yoga rooms, beer taps, and swimming pools, were the epitome of the company's operations during its peak. However, Briggs Elwell, CEO of RLTY Capital, a real estate finance company, believes that these lavish amenities hindered WeWork's path to profitability.

"As impressive as these locations were, they were not helpful for the company as it attempted to become profitable," Elwell stated.

Hodari acknowledges that Industrious, with over 165 coworking locations worldwide, could potentially take over a few WeWork sites. However, he clarifies that the company would be unable to assume WeWork's largest office spaces entirely. Instead, he predicts that these coworking spaces will gradually disappear from city centers as companies grapple with affordability issues, and landlords become more hesitant to rent out entire buildings for flexible working arrangements.

WeWork, once valued at $47 billion, has experienced a rapid decline following its failed initial public offering (IPO) in 2019. With a significant presence in urban centers, experts have expressed concerns about the potential repercussions of its collapse on the commercial real estate market.

Despite WeWork's demise, Hodari believes that the broader coworking industry remains healthy, driven by companies seeking flexible working arrangements as hybrid work models gain popularity among employees.

"I think the chaos of WeWork in its really dramatic years was not good for the sector. It was not good for the reputation of the sector," Hodari opined.

He hopes that WeWork's bankruptcy will mark the end of an era, enabling the industry to move forward without being overshadowed by the turmoil surrounding WeWork.