By Corina Stef
Coworking continues to be a buzzword in today’s office landscape, as it goes from trend to stand-alone culture. Companies such as Impact Hub, WeWork or Regus cemented their status as powerhouses on the U.S. commercial real estate map, driven by the constantly changing needs of tenants.
Global coworking operator Spaces is growing rapidly as it announced it will double its New York City footprint by the end of the year. The company’s progress is a testimony of the culture’s increasing cohort. Michael Berretta, vice president of network development for IWG, the entity behind Spaces and Regus, discussed expansion strategies, the particularities of the New York City coworking market and upcoming prospects.
Spaces will soon open its third New York City and second Manhattan location. What is the strategy behind the company’s growth?
Berretta: New York is now the second largest startup ecosystem in the world, with more than 7,800 active startups in the marketplace, according to the Global Startup Ecosystem Report. These startups are turning toward flexible work solutions so they can move people into a new market quickly or adjust as needed. It also helps companies stay close to suppliers or customers and they can do all of this without committing to long leases or relocation costs, which brings great strategic agility.
We are very much in the midst of a coworking revolution. A recent study by JLL found that by 2030, flexible space will account for 30 percent of the total corporate real estate portfolios. When you become a member of the Spaces community, you immediately gain access to more than 60 million secure Wi-Fi hotspots and more than 9,000 professional meeting spaces around the world through the IWG network, owner of Spaces.
Expansion plans call for a new location in the up-and-coming Hudson Yards as well as in Brooklyn and Staten Island. How do you identify new locations for the Spaces brand?
Berretta: When choosing a location, space design is one of the key elements we look for in a building. We need a location that can be designed to accommodate a large, communal business lounge, meeting rooms, semi-private areas and private offices. Companies use this flexible concept to accommodate the rising trend of mobile employees and the way people want to work today. Any space we take needs to accommodate these shifting needs.
We also keep in mind where the building is physically located. Is it convenient to get to by car and public transportation? Is it within walking distance of a thriving neighborhood? Employers and employees spend a lot of their time at the office and convenience is key. At Spaces, we feel strongly about not only fostering connections between members but also the surrounding community. In some locations, we even have bicycles to encourage people to explore the local area or take a work break.
How does the New York City coworking culture and market differentiate itself from others in the U.S.?
Berretta: Yardi Matrix found that Manhattan has 245 coworking spaces equaling 7.7 million square feet—the most of any major market. This means there are a plethora of options for businesses of any types and sizes. And more than any other city, companies large and small are rapidly embracing the coworking trend. So, creative clustering is prolific in New York. Startups and entrepreneurs are housing together and benefiting from the collaborative environments.
No matter the size of a business, every company wants to have a base where they can bring potential customers and partners for meetings without letting down their brand. And, of course, a start-up with a handful of employees can only benefit from establishing their own professional community—a network with whom they can talk, brainstorm new ideas and forge new relationships. Spaces provides answers to all of the above. New York is a real jewel in any business network. Because it’s such a hub for other companies and for travel, a business can really benefit from having a New York office.
How do the workspaces of the future look like?
Berretta: Incorporating artificial intelligence into office design and the overall discussion of “smart offices” are hot topics right now. How will these technologies be integrated into the workspace and what will they monitor and control? Inevitably, these technologies will become more integrated and the data that these smart devices capture are going to further shape workspace design and office efficiencies.
Workspace flexibility is going to become even more prevalent. In the past, the idea of shared space has been associated with entrepreneurs and small business owners. Now that research has shown the value of community and creative clustering, we’ll start seeing larger organizations shifting towards a flexible workspace and design model.
And finally, biophilic design. We know the importance of natural light. Companies understand that access to nature increases employee happiness, well-being and productivity. With that in mind, you can expect to see more outdoor green space, indoor gardens and perhaps even paths specifically created for walking meetings being incorporated into office designs.
With the increase of supply in New York City, what does the future hold for coworking?
Berretta: With the rise of the mobile worker, businesses need to have the flexibility to provide a workspace option closer to where their employees live, and this includes the suburbs. Contrary to what many people believe, there’s an increase in suburban growth, much of this led by the “older generation,” many of whom are married and have children. Recent reports show that population growth in big cities is slowing while population growth is accelerating in the sprawling counties surrounding them.
Larger corporations will need to be able to provide working options closer to where these seasoned employees live if they want to attract and retain that talent. With that in mind, coworking companies will need to look beyond dense urban areas and incorporate the suburbs into their growth strategy. At IWG, we’re focused across the full spectrum of workers.
What are Spaces’ short- and long-term goals?
Berretta: Our immediate focus is on expanding Spaces into communities where there is a strong need for a collaborative, creative and flexible workspace environment without sacrificing the quality of our offerings. As we continue to grow Spaces and foster a creative mix of clients, we’re also focused on giving companies an inspiring place where they can really and create their own culture. It’s a unique balance between staying aggressive and keeping the best interests of our customers at the forefront of our planning.
Image courtesy of IWG