When WeWork CEO Adam Neumann pitched private investors five years ago, he pointed to a near future where WeWork would spend less on upfront costs for the majority of its buildings. The plan included coaxing more money from landlords to pay for construction expenses, in exchange for giving the building owners a share of the profits. 

But the money-saving effort didn’t come to fruition. Landlords now cover about half of WeWork’s construction costs before the company moves into a building on average, financial filings show, as is typical in the industry but well below the 75% of costs that WeWork envisioned five years ago. 

WeWork lured some of the most prominent tech investors in part by promising that it could shake up entrenched ways of doing business in real estate. But the experience with construction costs is an example of how the company has been unable or unwilling to modify its business model in ways that might slow its rapid cash burn. That has come back to haunt WeWork, which now urgently needs new capital and is scrambling to persuade public investors that it has a viable path to profitability.