The math on that point is clear: WeWork committed to more than half the total space it has leased within the past two years at a time when rent was rising nationwide, according to Jimmy Hinton, senior managing director, investments and analytics. More than a quarter of that space remains 'unsold,' presenting a significant amount of financial liability for the company, he says in prepared comments. Now WeWork finds itself in the position of having to market more than 7 million square feet of space as the economy is beginning to slow and businesses are taking a cautious stance in an uncertain political environment, Hinton adds.

Hinton explains that WeWork's business model, grounded in its strategy to build communities by saturating select markets, was predicated on positive leasing spreads between its own base rent and that of its sublessees, an increasingly difficult balance as prevailing market rents increased over time.

"As a result, risks inherent in WeWork's business plan would most probably have played out in periods of adverse market conditions," he says. "As we now know, such circumstances came in the form of restrictive capital supply to WeWork, not from a dearth of tenant demand."

As the company explained in its IPO, WeWork's workstation pipeline included five distinct phases—Find, Sign, Build, Fill and Run. The first three categories captured locations before opening, while the last two reflected open locations, Transwestern explains. As of November 2019, 66.6% of WeWork's Build space, 20% of Fill space, and 6.5% of Run space was vacant nationwide, with Atlanta exhibiting the greatest percentage of availability, at 42.4%, compared to the total market portfolio.

The report concludes that the overwhelming majority (90.5%) of risk is related to lease commitments still in the Build and Fill phases—in other words, where WeWork is constructing space it intends to sublease, or is currently subleasing, to corporations or individual memberships.

Of the top five metros as measured by WeWork total square feet, New York, Washington, DC, and Los Angeles have the greatest percentage of available space classified in these phases.