RALEIGH — Three and a half years after the COVID-19 pandemic arrived the landscape of work has changed. Remote work, which was previously the exception, has become a norm for those in jobs that allow it. According to recent Gallup numbers, for those with remote-capable jobs, exclusively remote workers make up 29% of the workforce, with only 20% exclusively in-office. More than half, 52% of workers, are hybrid.
These stats are good news for one sector: coworking.
While coworking spaces existed before the pandemic, their numbers have exploded as workers embrace the new dynamic. Despite recent threats of bankruptcy for WeWork and with more employers demanding workers return to offices, the high-profile face of coworking, the industry itself is hitting its stride, and new locations continue to open.
Work locations for US workers with remote-capable jobs, 2019-2023. Gallup
Filling the Gap
When the pandemic hit, coworking spaces emerged as an opportunity to get out of the house. Many employees embraced the virtual work opportunities but still missed in-person interactions and sought out coworking spaces to fill the gap. As COVID restrictions lifted, employees resisted a return to offices, leading some companies to make hard decisions about their mostly empty office spaces.
Coworking spaces have provided a flexible solution as employers and employees continue the quest for an ideal work structure. Most coworking spaces have office suites that allow companies to lease smaller flex spaces with more perks and less overhead. Some employers are offering stipends for coworking to replace office spaces that have closed. Others rent coworking spaces for classes or retreats to provide team opportunities to touch base in person a few times a year.
Innovate Carolina Junction, a coworking space on Franklin Street, nears opening – here’s a preview
Prior to 2020, most coworking spaces were the domain of start-ups who hadn’t yet reached the point of affording their own office space. Lauren Romer, Executive Director of Raleigh Founded says that while they still capture that audience, there’s a lot more diversity to their users.
“We’ve seen an increase in remote workers and those looking for community after being isolated working from home due to the pandemic,” said Romer. “We have also noticed digital nomads that will cowork with us for a few months while they are exploring Raleigh before heading to another area.”
Other solutions have arisen to address the work-flexibility paradigm as well. Romer mentioned that some new apartment complexes are even being built with specific collaborative workspaces for tenants, similar to coworking.
“Recently we noticed members leaving our spaces to try free coworking spaces in their apartment buildings but inevitably coming back because they miss the sense of community.” She continued, “Community is a key factor for people choosing coworking spaces.”
New lux cowork space with speedy concept is opening in Raleigh
Investment and Growth
The WeWork story was a boom-to-bust narrative that drew the eye and imagination of many. The company offers coworking and flexible office spaces across more than 30 countries and over 100 cities. At its peak, WeWork was valued at $47 billion. After an IPO faltered in 2019 the company began a downward spiral; as of this week, the market cap for the company stands at about $200 million.
“WeWork has always been a bit of a blessing and a curse for the coworking market,” said DeShawn Brown, founder and CEO of Coworks, a software platform for managing coworking and flex spaces. “They deserve credit for creating a name-brand, well-known entity that arguably put “coworking” into the general lexicon. That, and some truly dynamic and engaging spaces. But due to their chaotic rise and fall, it’s now cast a negative light on the industry.”
Romer agrees. “There might have been a different picture that was painted with WeWork than what is the typical reality of what a coworking space is designed to do,” she said.
WeWork staying alive? CEO says coworking giant ‘to renegotiate nearly all our leases’
Alison Rogers, founder and owner of Blush Cowork in Cary can attest to the fact that running a coworking space has not led to billion-dollar valuations.
“Lenders and banks haven’t even caught up to coworking as a thing,” said Rogers. “Lots of more traditional investments or loans or any sort of financial backing is not there. They’re just like, ‘Coworking. We’re not sure where to put you.’ It’ll end up in like, hospitality, or real estate.”
Romer also agreed that coworking is not a money-generating industry. But for those who want to be a “community driver”, coworking is “where the real magic can happen.”
Building Community
Across the spectrum, from all the owners and managers of coworking spaces and resources, the word on everyone’s lips was “community.”
“We really define this category as “Space As A Service,” Brown told me. “That’s an intentional definition because the best coworking spaces really offer a compelling service and experience beyond 4 walls and wifi. The best spaces offer a community of professionals, interesting events, and on-demand service and amenities.”
“Truly, we are in co-working because it’s a community driver,” Romer said in our call. “We really do create community here and make it more than just the space.”
“A lot of the spaces that are opening, they’re all a little bit different. [They] are really creating these communities that are just a perfect fit for certain groups of people,” said Rogers. “And yeah, I think it’s really exciting to see some of the variations.”
A great example of those specific community variations is the newly opened Carspace. Located in northeast Raleigh, this innovative concept is a combination of coworking space and social club. And, as the name implies, it focuses on cars.
“The car community is a very tight-knit group. It’s just an icebreaker conversation piece,” explained Anthony You, cofounder and CRO of Carspace. “So we literally created that environment to have conversation pieces within our walls. And with coworking, it just kind of fit to have those like-minded people and a community that really likes to help each other.”
The Fight for Remote Work
While many employers have embraced fully remote or flexible/hybrid work options, some big names are pushing the return to the office hard. Several companies announced the enforcement of back-to-office rules beginning after this Labor Day weekend including Amazon, Google, Merck, and Meta. Locally, IBM and Red Hat are allowing some hybrid work flexibility, but IBM CEO Arvind Krishna was also quoted in May saying that “your career does suffer” when choosing to limit in-office time. Bandwidth, which opened a new 40-acre property in Raleigh last month, has been requiring employees to be in-office five days a week since last September.
Raleigh tech company Bandwidth to require employees to return to in-person work
Meanwhile, many are watching for movement on the Epic Games property, formerly the location of Cary Towne Center. While the company had originally planned to open the campus in 2024, the distinct lack of activity on the property has led to much speculation about those plans. The company last confirmed its intent to develop the property in December of 2022.
Flexible work options have become a clear preference for those who can do their work remotely. According to Gallup numbers, the risk of turnover is high for those threatened with a lack of long-term remote flexibility. And while employers are pointing to performance and engagement issues, the numbers tell a different story. In the same report, Gallup states that hybrid and exclusively remote workers have the highest engagement. For hybrid employees, 2 to 3 days a week in the office was ideal for improving well-being and reducing burnout. Meanwhile, full-time, on-site workers were no more likely than hybrid workers to say they felt as though they were part of the organization’s culture.
The Evolution of a Community Culture
There’s an alternative to organizational culture. What if that culture moves from your company to your community?
Rather than limiting yourself to a day with your colleagues in a single company, coworking spaces facilitate networking and social interactions not just across organizations, and industries, but also within your neighborhood. Your company’s ping pong table might be a nice touch, but how about the flexibility of a location on the way to your kid’s camp or a 5-minute commute home? Most spaces are also in neighborhood locations that are flexible and proximate to the things that matter most to their users.
“Coworking spaces are evolving to directly address the value prop of the physical office by focussing on events and culture-building within the community, offloading that from the employers,” said Brown. “The reality is that the majority of the coworking market is overwhelmingly made up of smaller, regional or local players.”
For those in the coworking industry, the path to success means more. More space, more locations, and more amenities. And by those benchmarks the Triangle coworking community is successful.
In addition to Carspace, several locations are growing or opening. Mel Wright, owner of Raleigh’s The Wright Village is in the process of opening a second location in Durham. Raleigh Founded is adding to its four locations with a new Cary Founded space, scheduled to open in November. Highwoods Properties recently opened The Commons in downtown Raleigh (a rebranding of space previously managed by Industrious). And several coworking locations have expanded features and amenities like catered food services, more networking and events, and podcasting spaces.
But the most impactful changes?
“Making your space as inclusive as possible. Not just thinking about different backgrounds and demographics, but also thinking about neurodiversity and disabilities,” said Romer. “Making sure your space is designed for everybody.”
