In the Wake of WeWork
WeWork, the co-working office space disruptor, filed for bankruptcy this month either because the company had too much debt, or its version of co-working was flawed, or both. But in its wake, a new crop of companies are trying to solve the conundrum of keeping office spaces occupied while giving landlords and tenants flexibility, according to a new article in the Commercial Observer.
“It’s very competitive,” said Matt Himmelsbach, a managing director at Newmark (NMRK), who leads the company’s global coworking practice in the article. “In markets that are getting hit harder with the office downturn, it’s an opportunity for coworking providers to get a better deal and lock in right now. Then, in markets that are performing well, you’ll see more strategic deals in areas that are more up and coming. But, either way, I think you’ll see expansion by operators in the next couple of years.”
“Most of the landlords that have coworking or WeWork space are getting unsolicited proposals from many, many operators,” he said. “It’s a bit of a knife fight to figure out who can actually come out on top.”
An example is Codi. “So, first of all, Codi is not a coworking company,” Christelle Rohaut, founder and CEO said in the article. “We see ourselves as an office as a service company. We help companies find and manage fully private, turnkey office space at the most flexible lease terms on the market. We match the company with the right property, which is typically an underutilized vacant office space. Then our consumer-style services handle moving and the office management process.”
"Another proptech startup looking to fill the WeWork void cited in the article is Radious, a Portland, Ore.-based online marketplace for residential workspaces. Unlike flex space startups focused on the commercial real estate office market, Radious has made its niche in the residential sector, CEO Amina Moreau said of the company she co-founded in January 2022.”
Whether or not WeWork emerges from bankruptcy, most industry analysts don’t expect a return to the old ways of doing things.
Recognizing that WeWork’s bankruptcy is highly significant, Zandieh said it is not the final word on what the return to office will look like.
“It represents a pivotal moment for recalibration and innovation in the office space sector,” said Ashkán Zandieh, managing director at the Center for Real Estate Technology & Innovation (CRETI), and formerly tri-state head of real estate and broker partnerships at WeWork, according to Commercial Observer. “This event has spurred a rethinking of office space utility and design, pushing the industry toward more flexible, tech-integrated, and employee-centric models. The future of office spaces is being reimagined, and this transformation is an opportunity for growth and revitalization in the industry.”