In part 1, we shared the history of the flexible workspace industry from 1992 to 2011. In that period, incredible and accelerated adaptation brought coworking as a new operating standard. In this segment, we explore how adaptation is embedded in this industry, enabling us to squarely meet today’s challenge and seize opportunity.
The Fad becomes a Trend
The concept explodes across the US (and worldwide), not in small measure due to the Great Recession. In addition, WeWork drives larger and frequent openings and emerging brands Industrious, Level Office (now Novel Coworking) and an alternative model in Convene fuel industry growth. Deskmag is immersed in this industry as an expert (and excellent) resource in operator-driven metrics worldwide. Hundreds of individual operators join the trend across the US and thousands across the globe. Adaptation now appears as hybrid configurations: Private offices now account for perhaps 30%-40% of the square footage as the executive suite/business center merges with the coworking concept. Regus (now IWG) tinkers with their existing spaces, providing some open seating workspace for perhaps 4-8 people. Eventually, they will acquire Spaces, a true coworking brand, with more open seating options. As the GCUC conferences go global, so does a high-demand session discussing how to make money in coworking.
2018 to Present-day
Prior to what was exposed by the failed WeWork IPO (and anticipated by many), the landscape in 2018 appears ripe for coworking in every office building. Corporate users continue to shrink their global lease portfolios and now expect flexible workspace options to supplant some long-term leased spaces. Microsoft makes a large membership commitment for their teams across WeWork locations. The advent of FASB accounting rules influences the broader move to flexible workspace. This frantic pace toward flexibility encourages Landlords and Brokerage firms enter the fray with their own solutions. The rise of Hana by CBRE, Studio by Tishman Speyer, Hines2 by Hines Interests are just the largest names stepping into the role of landlord/operator or creating partnerships with existing entities. This adaptation is to capture more of the revenue in-house rather than sacrificing increasingly larger footprints, and corporate users, to operators. Flexible workspace becomes a standard building amenity. Salesforce Tower, currently under development in Chicago, will expect Hines Interests to incorporate a full-floor amenity of flexible workspace. Doing so attracts other tenants wanting to build and retain talent in this work-as-destination space. All of this will now be implemented under the dramatic new guidance – and next adaptation – imposed by COVID-19.
The Next Normal – and “How?” – is already underway
The unprecedented nature of global shut-down by COVID-19 brings us a bit full-circle. The forced, final push to greater Work-From-Home (WFH) initiatives demands us to adapt under accelerated conditions. This is even more critical in large CDB’s with high-rise office spaces. As many have said, until we see a vaccine or palliative, gone are the days of the 80 square feet per person workspace. We are not likely to see a return to the large, 250 s.f. private office, but more closed, private spaces will become the standard for some time. This harkens back to the pre-coworking executive suite model. Where open seating exists, more physical partitions will arise. Movable walls, wearables to signal violation of social distancing, face masks and fewer employees required on site are already marking the next normal by corporate and facility planners. Touchless entry, touchless restrooms, frequent and rigorous sanitation are minimal conditions to safely open offices, per the user’s perspective. Cushman & Wakefield has been first to openly share their “6-Feet Office” solution. Directional pathways, color-coded workspace perimeters and reduced occupancy meeting rooms are just some of the initiatives proffered by C&W.
While we cannot predict much about the near future, we have witnessed repeated and accelerated workspace adaptations in just this century. Our team at YES! can work with you to manage these new configurations through deploying our in-depth Operations Manual and Operating Protocols, included in our proprietary playbook. Landlords and Developers are asking for our expertise in HOW to build the flexible solution in their portfolios and individual assets. Our collective ability to pivot demonstrates our capacity for resilience and strength while providing perhaps a little comfort in understanding that this, too, shall pass. We will emerge from this having learned more about ourselves and each other, and our great capacity for reinvention.
Stay safe and stay well.