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Coworking Provider MakeOffices Is Closing Down

The MakeOffices location in Clarendon, photographed in 2016.

MakeOffices, a homegrown D.C. coworking provider with nine locations in the region, is closing down. 

MakeOffices Chief Operating Officer Josh White told Bisnow Wednesday the company was forced to shutter because of the financial difficulties the pandemic has created for the coworking industry and the business world at large.

“The challenging economic environment was certainly felt by our membership, which resulted in increased terminations and reduction in revenue that made ongoing operations challenging,” White said.  

The company notified members at three locations that MakeOffices would shut down and transfer management of the coworking spaces, the Washington Business Journal reported.

JLL is taking over management of the 800 Maine Ave. SW space, MakeOffices' flagship location at The Wharf, the brokerage confirmed. JLL, which leases the building on behalf of landlord Hoffman-Madison Waterfront, will transition the flexible workspace this month to new branding, a JLL spokesperson said. It hasn't yet revealed the new branding. 

MakeOffices memberships at the space will remain active, and they will be assigned Feb. 1 to JLL, which said it will honor current membership pricing. The staffing and payments will also transition to JLL on Feb. 1. 

The coworking provider also has locations in Rosslyn, Reston, Tysons, Bethesda, Dupont Circle and K Street, and it expanded to Philadelphia and Chicago with three locations in each city. 

White said the company is working on agreements with JLL and other operators, which he declined to name because the deals haven’t been finalized, to take over management at all of the company’s remaining locations. It has finalized one deal in Chicago with EQ Office to take over the River North coworking space.  

The company is working on these deals because it wanted to ensure its members would be able to remain in their offices, White said. The deals would also allow MakeOffices’ on-site employees to keep their jobs and transition to the new companies, he said. These on-site employees make up about half of its 30-person workforce, and the remaining employees have been laid off as part of the closure.  

Prior to March, MakeOffices had brought in record-high revenues for five straight months, White said. Amid that momentum, MakeOffices brought on Jeffrey Langdon as CEO to help scale its portfolio. Langdon, a 30-year commercial real estate veteran, began consulting for the company in January 2020 and took the leadership role in March.  

Langdon left the company last month, after it became clear that scaling the company was no longer possible. White said he has been leading MakeOffices since Langdon's departure.  

“Jeff’s job was to scale the business, and once we came to the realization that wasn’t going to be possible given the financial constraints the business was undergoing because of the pandemic, the decision was made to focus on unwinding in a way that prioritized continuity with members and landlords,” White said.  

The closure comes as the coronavirus has taken its toll on the coworking industry. WeWork has closed three locations in D.C, Serendipity Labs is going through a bankruptcy restructuring process, and three major coworking companies have been sued by landlords for failing to pay rent: Breather, Knotel and Industrious

MakeOffices was founded as UberOffices by Raymond Rahbar in 2011. Two of the company's investors, MRP Realty and former EagleBank CEO Ron Paul, ousted Rahbar in August 2016. MRP Realty principal Zach Wade took over as CEO in 2017, and he stepped aside in early 2020 as Langdon took the helm of the coworking firm.

The removal of the founder led to a lengthy legal battle between Rahbar and the two investors that appeared to end with a settlement in January 2018 but was then revived two months later when Rahbar filed a court motion saying the two investors failed to make the agreed-upon payment. 

Rahbar now says that he has been working with federal investigators on a matter involving Paul, who retired from EagleBank in March 2019. Bisnow couldn't independently confirm the federal investigation, and Paul didn't respond to a request for comment. EagleBank has previously disclosed that it has been subject to a federal investigation, but it is unclear with which agency and what the query was regarding.

"I recently became aware that others destroyed something I had worked hard to create with so many others," Rahbar said in a statement to Bisnow. "That being said, MakeOffices' closure does not change our efforts in working with the FBI and Federal Reserve to ensure that Ron Paul and friends are held accountable for their criminal extortion. Not wanting to affect the criminal cases or grand jury deliberations, I'll have more to say when Ron Paul is in federal prison." 

UPDATE, JAN. 12, 1:25 P.M. ET: This story has been updated to include comments from MakeOffices Chief Operating Officer Josh White.