Coworking Spaces May Help to Revitalize Cities
During the pandemic that has gripped many major cities for more than a year now, city governments encouraged people to stay home to slow the spread of the coronavirus. But with the advent of vaccines, that message has shifted, and cities are now pushing to bring people back to offices to help revive their downtown areas, and they see coworking spaces as a way to accelerate that effort.
Over the last three months, Miami, New York, and D.C. have announced partnerships with WeWork and other coworking spaces to offer discounts to companies bringing people back to the office. The way the partnership works is that the coworking space finances the discounts without city subsidies, but the cities are using their promotion and marketing power to push people toward WeWork and other spaces.
By getting people back into office major cities can solve many problems at once, from jump-starting the economy to solving the problem of how to bring people back downtown to shop, buy lunch, drink coffee, and revitalize other ancillary businesses that depend on an office workforce. WeWork is planning to expand the partnership model around the country and the globe.
While coworking companies were the first to feel the pain when people stopped coming into the office, given the short-term nature of their leases, they can also be the first ones to benefit from the return to work. There's never been a stronger moment for flexible coworking spaces because they provide turnkey solutions to scale.
The ongoing rollout of the vaccines has given people the confidence to start returning to the office, and the city. Small Businesses are critical to the economic recovery in the short term because they can start with a small co-working space and expand as they build momentum, and they aren't saddled with upfront costs.
WeWork and other coworking spaces are made for businesses that are going to come back with maybe two employees, and then as they grow move into a larger office in a month or two when they're ready. Many other coworking spaces are offering deals with steep discounts, like not having to pay rent for the first three months of an annual lease, which is a big deal for businesses trying to get back. It gives them breathing room.
Other coworking spaces include WorkChew, a D.C.-based startup that turns restaurant and hotel spaces into flexible workspaces during the hours when they are underutilized. WorkChew is a unique multiplier for recovery because it helps connect restaurants, hotel groups, and startup businesses to grow the business
Sector in a city.
Another coworking space making its way to DC was launched by Georgetown MBA students Kelsey Lents and JP Coakley, called Hatch. Hatch runs a coworking space, much like a WeWork or Cove, but with both a full-time and part-time childcare option. Their mission is to cater to working parents who work the types of jobs that WeWork and other co-working customers do but focus on the important element of good child care in order to allow the self-employed or telecommuting worker to be their best.
Another coworking space developed to serve the needs of an under-recognized community in DC is The Gathering Spot. The Gathering Spot is a private networking club for the Black community started by Ryan Wilson and his former college roommate from Georgetown University TK Petersen. The first location launched in Atlanta in 2016. The Gathering Spot’s mission is to bring like-minded individuals together to network and support one another in business and life.
For the city it's a rising tide lifts all boats scenario where neighboring businesses feel the benefits of the resurgence in foot traffic from the workers now coming into the office, powering moments driven by those workers like Thursday happy hours at the beloved bar near the office, or team lunches will bring a boost to those businesses who have been really missing this audience throughout the pandemic.
In midtown Manhattan, for example, foot traffic is still down by more than 50%, bringing workers back to offices will be critical to support retail and restaurants in those business districts. Bring office workers back to those areas, is fundamental to the city's ecosystem.
In addition to foot traffic concerns, a lot of remote workers have left the states they were previously required to live in, leading to problems such as lower tax revenue and greater vacancies for apartment owners.
Some states with less of an established workforce base are using this opportunity to draw remote workers to find new homes in their states. For example, West Virginia launched a program to attract remote workers with an incentive package that includes $12K in cash payments, free outdoor recreation, and free co-working space. WVU's Morgantown campus and the program are planning to build out three new coworking spaces that the university will operate in Morgantown, Shepherdstown, and Lewisburg with subsidies from the state government. The goal is to put the spaces in busy locations where the workers can help revitalize the surrounding retail and restaurants.
Coworking spaces will become business revitalization centers for communities. So to all developers, let's start building some “energy centers”!!!!