Much has been written recently about the upcoming initial public offering by WeWork. But less has been written about the company’s impact on the cities in which its co-working facilities are located.

WeWork claims to have a positive impact on not only the companies leasing space from it, but also surrounding businesses. So Moody’s Analytics REIS Chief Economist Victor Calanog and Economic Analyst Keegan Kelly set out to explore whether this promised benefit is really happening. The two recently released a case study using New York City as its subject. Here’s what they found:

  • While rents and occupancies might have changed in four nearby office buildings studied, there was no discernible effect that could be attributed to WeWork’s entry into the area.
  • Of four nearby apartment buildings studied, there was no relationship found between rent levels or vacancy rates as a result of WeWork.
  • There was one measurable result: “Average rent levels of surrounding office buildings experienced a decrease in standard deviation from the mean, with ranges tightening, following the signing of the respective WeWork leases.” This means that WeWork causes rent levels to converge by setting a rent level that surrounding office building managers feel compelled to follow.

The authors concluded that the bottom-line effect of WeWork was ambiguous, summing up the effects as follows: “Despite claims of raising economic activity and business vitality in places where WeWork enters, it was never reasonable to believe that WeWork’s presence would be a tide that lifts all boats, with unambiguously positive effects. The more appropriate analogy is that WeWork is like a pebble cast into a pond, disturbing and changing the ecosystem.”