Coworking Operators Emphasize Collaboration As They Rework Space For Return To Office
As more markets roll back pandemic-era restrictions on occupancy and more employers firm up plans for a return to the office, coworking operators are keeping up with the expectations and desires of users by updating spaces.
The alterations have evolved since the start of the pandemic. Coworking operators made early investments in air quality and HVAC systems as well as sanitation measures. But now, many users are looking for other accommodations geared more toward getting people back into the office and giving them a welcoming space suited to new work needs once they arrive.
WeWork reported Monday that April and May were its strongest months for leasing since before the coronavirus pandemic, with gross desk sales for those two months reaching an equivalent of about 4.3M SF.
WeWork Chief Operating Officer and President Shyam Gidumal emphasized that WeWork is consistently investing in its spaces and the buildings that house them and that this isn’t necessarily something new. Updating workspace to meet evolving demand is “an ongoing part of our business,” Gidumal said.
Gidumal declined to share specifics on how much money WeWork is spending on renovations to meet tenant requests and noted that who is footing the bill varies from location to location, but Gidumal did say, “At the end of the day, we're paying for it.”
When a big company comes to WeWork and says it wants changes to optimize its space, WeWork tries to come to a mutually beneficial accommodation, Gidumal said.
“If we believe that that is something that will last for a sustained period of time, we can amortize part of that cost” not only over the period of time that particular member stays in the space but also possibly over a period of time extending beyond that member’s tenure, because many of these alterations are things that are expected to be desirable in the long term. This arrangement often saves members money in the process, Gidumal said.
The momentum for granting tenant-specific build-outs started pre-pandemic, but post-Covid, coworking operators are more amenable to making these changes, said Sarah McCann, real estate strategy associate with architecture, interior design and workplace strategy consulting firm Vocon. Clients of Vocon’s coworking practice range from the biggest operators to smaller, startup-type coworking companies.
All across the country, McCann says Vocon is seeing tenant-driven changes to coworking spaces among its client base. McCann said she thinks that the willingness of coworking operators to make renovations according to tenant requests is at least in part because of the rise in availability of sublease space, especially in cities like New York, where major coworking operators have many locations.
A person who would have gone to a coworking space in the past to find a home base for business operations now also has the option of looking for a well-built-out office that is on the sublease market for a good rate, McCann said.
“Tenants are in a strong position right now,” she said.
Many of the features that tenants are clamoring for were already in increasing demand before the pandemic but are especially sought-after now. Even before last year’s public health crisis, some firms felt they didn’t have enough meeting space in their coworking offices. Now, everyone wants places to make and take calls, and they expect their offices to be outfitted with the technology to allow them to do that, McCann said.
Along those lines, Gidumal said WeWork has invested “a fair amount of money” into creating what it refers to as collaboration hubs. These areas provide a space for collaborative work among members of a team, which is a big selling point for having workers together in the office.
A few years ago, many coworking users were coming into the shared offices to work individually in an office environment. But now, Gidumal said, many companies are asking WeWork to help them design and make available spaces that are much more collaboration-oriented. It is an amenity that traditional office landlords have also worked to add to their spaces as the return to the office becomes reality.
Many flex office operators have also been looking at the role of hospitality in office space — namely, how to create a great experience for office workers, JLL Managing Director of Global Flexible Space Ben Munn said. This concept wasn’t necessarily born out of the pandemic, but it has definitely accelerated as a result of it.
JLL operates six flex offices across the country, from Chicago to Brooklyn, with more coming online in the near future. Some of the spaces, like the 50K SF Orchard Workspace by JLL at 15 MetroTech Center in downtown Brooklyn, delivered during the pandemic and had some of these features already built in — ensuring air quality and HVAC systems are high-quality, adding mobile dividers to section off space and implementing contactless entry features. But in all locations, JLL has taken steps in offices to make them “healthier and more welcoming” for returning workers, Munn said.
Among those steps has been a de-densification of space — something Munn says he has seen other flex office operators and other traditional office providers do.
Especially as the debate about where workers can do their best work and why people should come back to the office continues, creating a space that is welcoming and attractive to flexible office users has grown more vital.
“It’s about creating a place you want to be in,” Munn said.
CORRECTION, JUNE 24, 7:30 A.M. PT: A previous version of this story misstated a location where JLL operates flex space. It doesn't have a flex space in Seattle. The story has been updated.