Real estate mogul Barry Sternlicht told CNBC on Friday that while WeWork has had its failures, there's still a real business to be found at its core.
"This company got a little off of the rails," said Sternlicht, chairman and CEO of investment firm Starwood Capital, which has about $60 billion in assets under management. But he still think's "it's a real company."
WeWork has had a tumultuous past few months as it tried to go public.
The office-sharing company revealed a $900 million loss in its prospectus; pulled its initial public offering after concerns about a falling valuation and its corporate governance structure; and fired its CEO and top stakeholder Adam Neumann.
Without additional funding, WeWork will likely run out of cash by mid-November.
"It was built for hypergrowth and that is too capital intensive," said Sternlicht, who in 1991 co-founded Starwood Capital, which created Starwood Hotels, now part of Marriott, as well as other leisure brands. "You have to build steady growth, not hypergrowth."
Sternlicht in the past had a negative outlook on WeWork before becoming bullish on the company. "I'm conflicted on this," he said, when asked about his current view. He would only say "we're involved" and declined to comment any further.
Facing a cash crunch, WeWork's biggest outside shareholder, SoftBank, and J.P. Morgan, which was supposed to lead the IPO, are working to put together a financial rescue package, according to people familiar with the matter.
Sternlicht added that WeWork needs to cut its overhead significantly in order to turn itself around. "You have to reshape the company," he said. "If you cut the overhead there's a profitable business at some level."
A spokesperson for WeWork was not immediately available to respond to CNBC's request for comment on Sternlicht's statements.