The impact of the Covid-19 pandemic on the coworking industry has been profound. From WeWork to Industrious to Convene, all the major operators have had to hunker down and adapt to a socially distanced, low-density operating model. For industry veterans this is a tough pill to swallow, as high density/revenue per square foot is the lifeblood of the arbitrage business model on which they rely. Rent abatement in both directions has been the one tactic that seems to have made sense throughout the pandemic thus far.
However, at some point in the (hopefully not too distant) future, people will emerge from their home offices and ‘go back to work.’ No less than three promising vaccines have recently been announced, and it appears as though some time in the summer of 2021 there will be a return to (a new) normalcy. This would suggest that there is light at the end of the tunnel for the industry. Indeed, an August article by Motley Fool wonders if we are heading into a boom time for real estate investors ready to take the plunge into coworking?
There has been a lot of talk recently about the emergence of a hub and spoke coworking model where coworking spaces provide closer-to-home work spaces for employees whose company HQs might be downtown.
This seems to make a lot of sense. With the massive rise in remote working, which looks likely to continue after the pandemic, coworking spaces have the potential to pick up new users who have adjusted to working away from the office.
Research by PwC suggests that 72% of workers would like to continue working remotely at least two days a week. If the future of remote work does not mean ‘at home’ only, then coworking spaces can be a beneficiary of the adjustments that companies and employees made during the pandemic. In the corporate context this is being framed as hybrid working, where employees work some of the time at the office and some of the time at home. And we would add…some of the time at your local coworking space. But is it just enough to say that suburban or ex-urban coworking spaces will on their own become effective spoke locations? Will new design typologies be needed to accommodate different use patterns? Will new leasing and pricing models need to underpin new usage patterns?
According to Gensler there are four modes of work– solo/focused, collaborative, social, learning.
Given the fact that remote workers during the pandemic are reporting that they are more productive working at home, this raises questions about what kinds of spaces (offices, rooms, open areas) people will now need when working outside of the home. Team rooms? Collaboration pods? Are coworking spaces designed around hotseats, dedicated desks, and sardine-can office desks redundant if solo work is being done effectively at home?
These are the types of questions we are asking at OpenWork Agency. We are in this for the long haul. As part of our vision for helping real estate investors invent a fresh future for the coworking industry, we have recently partnered with the amazing team at Barcelona’s Happy Working Lab. HWL’s Vanessa Sans and Alexandra Ramió have been pioneering in the coworking and coliving consulting space in Europe for quite some time, and we are super excited to collaborate with them in leveraging our shared vision for the future of coworking to deliver value to clients at scale.