Table of Contents Real Estate Transactions Adam has led our vision about the future of how people work, live and grow and provided valuable real estate insights that have helped drive our growth strategy. Adam has also made personal investments in real estate based on his vision of the future of real estate. In the early days of our business, at a time when landlords were reluctant to recognize the benefits of WeWork as a tenant, Adam bought four buildings in order to help prove WeWork as a viable tenant to landlords. In December 2017, Adam expanded his participation in purchasing real estate by buying a majority interest in downtown San Jose development projects, a first step in pursuing the Company’s vision for the future of cities. As we become a public company, our board of directors and Adam wanted to not only ensure the absence of any actual conflict of interest, but also avoid the appearance of any conflict of interest in relation to any of Adam’s personal real estate investments. As a result, we are providing disclosure about all of these properties and, more importantly, have created a mechanism for an orderly transition of these properties from Adam’s ownership that ensures the Company gets a favorable treatment in the transfer of these assets. Adam has committed not to purchase any additional properties with the purpose of making them available for our occupancy. Properties Leased to The We Company We are party to lease agreements for four commercial properties with landlord entities in which Adam has an ownership interest. These leases, individually and in the aggregate, are not material to our operations and represent only four of our 528 locations as of June 1, 2019. For one of these four properties, we entered into a lease agreement with the landlord/partnership entity within one year following Adam acquiring his ownership interest, and in the other three cases we entered into a lease agreement with the landlord/partnership entity on the same day that Adam acquired his ownership interest. During the years ended December 31, 2016, 2017 and 2018, we made cash payments totaling $3.1 million, $5.6 million and $8.0 million to the landlord/partnership entities under these leases. During the year ended December 31, 2018, we received payments from the landlord/partnership entities in the form of tenant improvement reimbursements of $11.6 million related to these leases. During the six months ended June 30, 2019, we made cash payments to the landlord/partnership entities totaling $4.2 million under these leases and received no tenant improvement reimbursements related to these leases. As of June 30, 2019, future undiscounted minimum lease payments under these leases were approximately $236.6 million, which represents 0.5% of the Company’s total lease commitments as of June 30, 2019. Personal Real Estate Transactions In connection with the formation of ARK, we decided to consolidate all of our real estate investment opportunities in ARK. As part of this consolidation, in August 2019 Adam entered into a management agreement with ARK Capital Advisors, LLC, which serves as the manager of the ARK acquisition vehicles and is referred to as the ARK Manager, pursuant to which the ARK Manager will exclusively manage all of Adam’s interests in ten commercial properties owned by Adam, including the four leased properties discussed above. The purpose of this management agreement is to provide the Company with the ability to take advantage of the real estate opportunities Adam had identified, while at the same time eliminating any conflict of interest between Adam and the Company. During the first year of the management agreement, the ARK Manager has full power, discretion and authority to make investment and management decisions affecting the properties, and the ARK Manager has an option to acquire any of the properties through a real estate acquisition vehicle managed or sponsored by ARK. The purchase price for the properties will correspond to the cost incurred by Adam in respect of the property (including the cost of running the properties, which Adam will bear until such time as they are sold), plus a pre-set annual cost of capital. Any purchase of a property by the ARK Manager pursuant to its purchase option will (1) be subject to the review and approval of disinterested members of the Company’s board of directors (which, for this purpose, exclude Steven Langman and Adam Neumann), (2) require the consent of the members of the ARK management committee designated by the Rhône Group and (3) be subject to any applicable procedures for entering into transactions with related parties as set forth in the governing documents of the relevant ARK-managed real estate acquisition vehicle. The ARK Manager will undertake customary due diligence investigations with respect to any property prior to exercising its purchase option, including obtaining third-party appraisals. 200