When Coworking Meets Retail

Tuesday, May 9, 2017

Telecommuting is gaining popularity with both businesses and employees, and, often times, remote workers turn to shared office space, or coworking space, for its office amenities and sense of community.  According to The New York Times, the number of employed workers in the U.S. who spent at least some time working remotely has increased four percent between 2012 and 2016 to now make up 43 percent. As a result of a growing virtual workforce, coworking is undergoing explosive growth. Coworking companies are turning to non-traditional working spaces in order to grow and reach employees who may need a less expensive alternative to shared office space, and, in the process, turning retail into an unlikely ally. 

It’s expected that more than one million people globally will work in approximately 14,000 shared work spaces in 2017. By 2020, coworking is expected to balloon to 26,000 spaces and 3.8 million remote workers. One of the limitations, especially for freelance or self-employed virtual workers, is the cost. Coworking space averages approximately $170 a month in the U.S., and that can price freelances out of the market.

Companies like Spacious and Switch Cowork offer a less expensive option by pairing with restaurants that typically only offer dinner service. Since restaurants that do not offer non-dinner service often have large, empty spaces during the day, both the startup and the restaurant capitalize on that unused space. During the day, virtual workers may use the tables and treat themselves to coffee and tea, Wi-Fi, power and the ambiance of a café versus an office. Once dinner service prep begins for the dining room, the work day is over, typically around 5 or 5:30 p.m. 

Spacious is a startup founded by Preston Pesek and Chris Smothers that currently operates in New York City, where approximately 2,000 restaurants sit empty during the day. Virtual workers can be alone or in groups, and Spacious can also work with groups on private meetings. For $95 a month, virtual workers can get unlimited access to seven Spacious partner restaurants in addition to having one free guest per hour (after that, it’s $6 per hour per guest). They also offer a reservation-free day pass for $29. Spacious features include coffee, snacks, Wi-Fi, work-friendly music, a host to take care of members and a digital platform for check-ins and payments.

“In a city where rent is such a meaningful component to a retailer’s expenses, and, therefore, its ultimate success or failure, Spacious is allowing restauranteurs to create a new revenue stream from their space during the daytime, when the space would otherwise have been vacant,” said HFF Managing Director Scott Aiese in HFF’s New York City office. “It’s a clear evolution of the sharing economy and analogous to an accountant and a bartender sharing an apartment.”

Restaurants and members aren’t the only ones who have taken to what Spacious has to offer. Three venture capital firms, Lerer Hippeau Ventures, BoxGroup and SV Angel; MetaProp NYC, an accelerator; and private investors participated in a round of funding last year, and the company is looking to expand to Boston and San Francisco.

Switch Cowork is trying to grow the largest "underground" network of freelancers, startups and remote workers in and around Austin, Texas, and the company is achieving this goal by marketing restaurants for work space. Co-founders Christa Freeland and Jacob Morin launched the company in November 2016 after they came to the realization that it’s difficult to work in a coffee shop due to size, limited access to outlets and often unpredictable Wi-Fi. They initially wanted a coffee shop designed for work, something akin to a blending of spaces between café and office, but Freeland noted that it came with issues.

“It’s risky to start because of the time it would take to build and that it's an unproven, very capital intensive model,” she said. “I thought of doing an MVP [minimum viable product] of that idea to just collaborate with well-designed restaurants that don't open during typical office hours anyway, to operate their space as a place to cowork.”

Available restaurants are updated on the Switch website. Cost for the service is $95 per month for a standard monthly plan. Switch also offers individual and team pricing. For those not sure about committing to a full month, the company offers a $10 daily rate after a free week to try out the service.

“We're a fraction of the price of a coworking space membership, and if you were to buy one cup of coffee a day at a coffee shop, that's just around our price-point,” Freeland explained. “Switch memberships include coffee/cold brew, and snacks. We also have power strips and extension cords that an on-site community manager can help with. We boast a variety of comfortable extra-large booths, ‘standup desks’ and outdoor table arrangements. It's a great way to get work done and meet other like-minded professionals in Austin.”

Restaurants are not alone in their venture to supplement profits by partnering with work-share companies. Last year, Staples, in conjunction with Workbar, the Massachusetts Coworking Network, launched Workbar at Staples in the Boston area. This new type of shared work space offers virtual workers high-quality shared space with ergonomic desks and chairs, flex offices, conference rooms available via reservations, private phone rooms, free onsite parking and unlimited coffee all inside three Staples stores in Brighton, Norwood and Danvers. There is a café area and, of course, free office supplies.

Shared work space in restaurant and retail space combines current employment trends with commercial real estate. The situation can be a win-win for property owners, coworking companies and a growing virtual workforce.

By Kimberly Steele, Digital Content/Public Relations Specialist

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