Co-working spaces are one of the hottest office trends right now, and they’re enjoying explosive growth in Charlotte. And with the increasing embrace of communal workspace by corporations – and the perks that go with it – traditional offices could start seeing changes as well.
That’s what panelists said Wednesday at a CoreNet event focused on the co-working trend. Once seen as the domain of plaid-wearing hipsters and tech start-ups, co-working is going corporate and becoming more mainstream, with major companies using co-working operators for some of their office space.
“The millennials are looking to work in a different way,” said Koo MacQueen, a strategic planning manager who oversees IBM’s 38 million square-foot North American real estate portfolio. The company has started using co-working providers to provide flexible space, short-term offices and locations for people to work in cities that aren’t big enough to open a full office. And while she emphasized that IBM isn’t replacing its offices with co-working spaces, they are getting more pressure to change from employees who work in more traditional office space.
“The rumor mill is starting to be, ‘Hey why don’t we have coffee and beer?’” she said. “We’re starting to feel pressure in our core real estate organization to start providing more of that.”
Here’s how it works: Users pay a monthly fee, generally between $100 and $200, for access to the co-working space. They can come in anytime, use any open desk, grab free coffee (generally from a local roaster), use the WiFi and gain access to networking events and other group activities. Reserved desks and private offices are available for higher fees.
The concept has been largely targeted at entrepreneurs and small businesses – people who don’t want to work at home by themselves all day, but don’t want or can’t afford to lease a traditional office.
But bigger companies are starting to sign on now, using co-working spaces for temporary offices during renovations and moves, or as a place to put “creative” teams to break them out of the monotonous landscape of cubicles.
WeWork is one of the big, national co-working companies that’s moving into the Charlotte market. The company signed a lease last month for two floors at the new 615 South College office tower, where it plans to open a 46,000-square-foot co-working space this summer. This is the company’s first Charlotte location. WeWork has deals with IBM, GM, Marriott, Bank of America and Sprint to provide office space for them.
Industrious, another national co-working company, plans to open its first Charlotte location in the Bank of America Plaza tower this summer as well.
Charlotte has gone from one to more than a dozen co-working spaces in and around uptown over the past several years. Other co-working spaces, like LOOM in Fort Mill, have opened in the Charlotte region as well. And the expansion is continuing, both with locally owned firms and the national operators. Charlotte-based Hygge is opening its third location just north of uptown, while Advent is more than doubling its space in Plaza Midwood.
“Co-working itself has changed very rapidly,” said Adam Wacenske, general manager of WeWork’s southern region. “What was once reserved for that one-person tech start-up working out of their garage is now morphing to include very large companies.”
The company has 140 locations worldwide, and is expanding aggressively.
“The future of work is changing,” said Wacenske. He said the roster of tenants has expanded from tech firms to lawyers, public relations companies, marketing firms and large companies. “It’s evolving to include everybody.”
The benefits go beyond the bells and whistles, said John Espey, CEO of Charlotte-based technology company Levvel. They’ve gotten business from other co-working tenants and found employees to hire from other tenants.
“It goes deeper than the free coffee and the beer,” said Espey.
Travis Garland, asset manager for 615 South College developer Portman Holdings, said the company studied co-working for years before deciding to bring in WeWork as a tenant.
“We don’t view them as competitors,” said Garland. “They’re good for the building because they bring in so much activity.”
He said that while co-working is growing rapidly, he does expect some of the smaller firms to face troubles in the next economic downturn.
“There’s a lot jumping in today because it looks attractive,” said Garland. “There will be some, when there’s a downturn...they won’t be able to hang on.”
But he said the influx of large companies to co-working means the trend has staying power.
“The enterprise approach is really in its infancy,” said Garland. “That’s going to be the piece that is going to create longevity.”