Coworking space popularity growing
A few years ago, co-working was a novel idea in Charlotte, conjuring images of plaid-wearing hipsters working on their software startups.
Now, the idea of communal office space is exploding in popularity, with a dozen co-working spaces open in Charlotte and major national players signing big leases at prominent uptown buildings. The co-working industry’s rapid growth is driven by the ongoing shift to freelance work, a growing proportion of young workers, a lack of funky small office spaces in Charlotte and big firms’ desire to cultivate locations for their “creatives” to work.
“I think it would be naive to think that’s just a fad or a trend,” said John Ball, director of office leasing for Trinity Partners. Last month, Trinity brokered a lease with WeWork, a national co-working company, for two floors of the new 615 South College office tower uptown. At 46,000 square feet, it’ll be the largest dedicated co-working space in Charlotte when it opens.
Another national firm, Industrious, has leased the 27th floor of the Bank of America Plaza building and plans to open this summer.
Despite these recent announcements, the total amount of co-working space remains a tiny slice of Charlotte’s market. For comparison, Bank of America recently leased more than 500,000 square feet of traditional office space at the new building under construction where the Observer used to stand. Nationally, co-working space accounts for less than 1 percent of the total office market, according to a JLL report last year.
And the industry, which is largely reliant on small businesses and “solopreneurs” to sign up for memberships, could be especially vulnerable in a recession, when small businesses are hit hardest and pull back sharply on expenses, or go under.
“(Co-working’s) sustainability through a downturn is still unknown,” the JLL report concluded.
But for now, co-working is enjoying an unprecedented boom in Charlotte, appealing to small businesses that either aren’t big enough or don’t want the hassle of a long-term office lease. For a monthly fee, generally somewhere between $100 and $200, members can come to a co-working site anytime, grab a desk, use the Wi-Fi, print documents, meet with clients and grab a cup of coffee (The free coffee is a big perk). Most locations also offer the option of a reserved desk or private offices, for an additional fee.
The pitch is simple: Freelancers and entrepreneurs get to work from somewhere besides their kitchen table or a crowded Starbucks, without committing to an office lease for more than a month. They also get access to community activities such as networking events, group bike rides, free yoga classes and business discussions. Another perk: Members can collaborate and pick up work from each other.
“Members are working with each other on projects almost daily,” said Philip Wegner. He opened The Launch Factory, a co-working space in the renovated General Dyestuffs building on Wilkinson Boulevard, in January. “We have a software company working with an architect...There’s just a huge demand.”
Richard Cuebas, principal at Integra Architecture, opened a Charlotte branch of his Puerto Rico-based firm last year. He’s now renting a private office in the HQ Charlotte co-working space at Packard Place uptown. The flexibility to scale up or slim down rapidly is a major draw, he said, and he hasn’t had to buy furniture or worry about the hassles that can come with starting an office from scratch.
“It’s better for us to stay flexible. If I want to move to a larger office next month, I can do that,” he said. There are other benefits too. Cuebas found his business lawyer through a referral from a member, and picked up an architectural commission from another member.
Rob Pressley said the diversity of firms in co-working spaces shows the industry has appeal beyond tech startups. He’s president of Coldwell Banker Commercial|MECA and redeveloper of the General Dyestuff building, where tenants in the Launch Factory include architects, construction firms and remote teams from larger companies.
“It’s a testament that it’s deeper than the tech people,” said Pressley.
Not just for entrepreneurs
Homegrown Charlotte operators still operate most of the city’s co-working spaces. Kevin Giriunas, an engineer by training, opened Advent Coworking in 2015 in a renovated Plaza Midwood industrial building. Now, he’s more than doubling the size of the business on Louise Avenue, adding 23 private offices to the communal workspace that are set to open in June.
“The demand is there,” said Giriunas, sitting in a glass-walled conference room, one of the semi-private spaces members can use. Indie music plays over the speakers, local art adorns the walls and a half-dozen headphone-clad members in the common area tap out work on their laptops. As larger companies expand into Charlotte – Industrious and WeWork have dozens of locations each, while executive suites giant Regus is introducing co-working to its locations throughout the U.S. – Giriunas said he’s not concerned.
“They’ll bring co-working awareness to many more people than we could on our own,” he said. And part of the allure of co-working is that each space has its own vibe – a renovated factory in Plaza Midwood or on Wilkinson Boulevard will always be different from an uptown office tower, and attract different members.
To broaden their reach beyond small businesses and startups, WeWork and Industrious have set their sights on big companies. WeWork has agreements with GM, Marriott, Bank of America and KPMG, among others, while Industrious works with Lyft, Chipotle, Hyatt, Pfizer and more. The idea is that those companies can get more “creative” space for teams to work in temporarily, without having to build it out themselves.
Ball, the leasing director for Trinity, said leasing part of an office building to a co-working space makes business sense for owners and landlords as well. They can sell it to other tenants as an amenity for their employees to drop in recharge their creative juices, and also offer it as temporary space for companies that are looking to relocate but don’t want to wait months to build out their new office space.
“If you’re chasing a deal...you can kind of bridge that gap” with co-working space,” said Ball. “I would not be surprised if some of our tenants use WeWorks. It gives you as a landlord and a leasing broker more flexibility.”