Flexible spaces: WeWork-like but not shared space

Inside The Cloud Room, a co-working space in Seattle’s Capitol Hill neighborhood that is thriving as workers seek a space that is not home and not the office. (GeekWire Photo / Kurt Schlosser)

The concept of shared spaces used for smaller businesses long predated WeWork.  For example, a competitor is taking over a shuttered WeWork facility in Seattle ("What’s next for the former WeWork space on Capitol Hill," Seattle Times).  From the article:

The company rents to a mix of individual workers, small businesses and companies looking to downsize their office space and secure shorter lease terms. Flexible office space can cost more per square foot than traditional offices but at the same time allows employers to cut costs by renting larger spaces like conference rooms only when they need them, Hughes said. Centrl’s two LA locations are nearly 90% occupied, he said. 

The number of individual coworking memberships has bumped up a bit since before the pandemic, “but it hasn’t changed dramatically,” Hughes said. “What has changed dramatically is the meetings.” Desire from workers and companies for meeting space “has grown dramatically over the last couple of years,” he said. 

The coworking business bets on companies small and large looking for shorter lease terms and flexible space they can easily scale up or down, in contrast to long-term traditional office leases.

The new idea in WeWork was to add "Silicon Valley like fun amenities" like beer on tap, coffee, ping pong tables and make it a big common space (hot desks).  

But they tried to scale it up far beyond what the potential level of business was and they crashed.

But there has long been a need for small, lower cost, space, which is one of the four points made by Jane Jacobs in Death and Life of Great American Cities ("Jane Jacobs and the Value of Older, Smaller Buildings," Journal of the American Planning Association, "Big Data Backs Jane Jacobs: Cities Need Old Buildings," Smart Cities Dive).  The NTHP did a report, Older, Smaller, Better Measuring how the character of buildings and blocks influences urban vitality, on this a few years ago and found:

1. Older, mixed-use neighborhoods are more walkable. 
2. Young people love old buildings.
3. Nightlife is most alive on streets with a diverse range of building ages.
4. Older business districts provide affordable, flexible space for entrepreneurs from all backgrounds.
5. The creative economy thrives in older, mixed-use neighborhoods. 
6. Older, smaller buildings provide space for a strong local economy. 
7. Older commercial and mixed-use districts contain hidden density.

Note that while I am hard core preservationist, this wasn't about historic preservation to Jacobs, but abou the economics of buildings, rentable space, and small business development ("Relearning and retaining (or not) old lessons: Urban economics, agglomeration economies, and adaptive reuse of "a large stock of old buildings"").

Typically this space was in core downtowns ("Even as WeWork goes bankrupt, co-working is poised to survive and thrive in other spaces," GeekWire).  

But in cities that are bigger and had more big buildings spread around the city, it's possible to do this in neighborhoods.  

And neighborhood business districts should try to have this kind of space anyway, to support a wider range of business development.  The Penn Avenue Arts District in Pittsburgh is a good example of this, and ideas about the development of "arts as business" as opposed to "arts as presentation and consumption."

These Philadelphia Inquirer articles discuss two projects there.

"Ken Weinstein wants to bring a version of South Philly’s Bok Building to Nicetown"  

The office market may be in the midst of one of its weakest periods ever, but Northwest Philadelphia developer Ken Weinstein is confident there is appetite for small working spaces in the city’s neighborhoods. 

That’s why he wants to convert and expand an old industrial and office building at 3939 Germantown Ave., known as the Olympian, into a towering space for nonprofits, start-ups, artists, and service providers. The project cost is estimated at $12 million. 

“Everyone talks about the softness in the office market right now, and that’s certainly a reality,” said Weinstein, president of Philly Office Retail. “But we’re finding that it doesn’t exist as much with small offices as it does with large offices, and it doesn’t exist as much in the neighborhoods outside of Center City.” 

The building to be converted.  Photo: Tyger Williams, Philadelphia Inquirer.

Weinstein has included flex spaces in four of his other projects, with space ranging from 11 to 23 units. All of them are occupied, and have waiting lists. That’s why he decided to try the model on a larger scale in North Philadelphia’s Nicetown neighborhood. 

Taking inspiration from South Philadelphia’s Bok Building  — Lindsey Scannapieco’s redevelopment of a former public high school into a popular warren of small businesses and studios — Weinstein wants to bring 115 “flex spaces” to the Olympian. These could be used for anything from art studios or yoga practices to small nonprofits and tech start-ups. 

Scannapieco’s successful renovation of a derelict public high school is almost four times as large by square feet as Weinstein’s project would be, and it offers no parking. Almost three-quarters of the business owners live in South Philadelphia, and three out of five do not drive. Its uses range from a bakery to therapy to a fine art school that occupies an entire floor.

The BOK  Building ("South Philly’s BOK building, known for its rooftop bar, is carving out space for creatives").

From the article:

The 340,000-square-foot Edward W. Bok Technical High School, which opened in 1938 but closed in 2013, has become a go-between, particularly for homegrown creatives who didn’t have the space or resources to work at home, and whose current setup could lack such necessities as heating. 

Unlike traditional office space, class A or otherwise, the BOK building has developed a reputation for being unfussy. It rents out for as little as six months and leases as much as an entire floor (10,000 square feet) or as little as 72 square feet for a jeweler who said that was all she needed for her and her tools — and who later designed Scannapieco’s wedding ring. 

Homegrown creatives are “really critical to a city,” Scannapieco said, noting that she spoke last month at a Philadelphia Arts + Business Council event about the role of art and development. 

Photo: Tyger Williams, Philadelphia Inquirer.

During the pandemic, BOK absorbed some of the costs of rent to keep tenants, providing what Maillie called “rent relief,” as well as rent deferments. Scout has assumed the cost for some tenants’ rents, either fully or partially, since last April, Maillie said — “no strings attached.” Of 118 applications, Scout was able to provide “some level of support” to 94% in an effort to maintain its 200-some tenants. Scout itself received $138,800 in coronavirus Paycheck Protection Program funds last April, according to federal data. 

“We came out pretty intact because of that,” Scannapieco said, noting that she then began to see interest from potential new tenants. Currently, about 70% of their tenants live in the neighborhood, she said, and 52% of BOK’s businesses are owned by women.