Tag Archives: wework

British Real Estate Investment Firm Gives WeWork a Go

Post By : admin 7 June 2018 Leave a comment

A colleague of mine in London who is a member of the Alliance of Tenant Representatives with me sent the following article about an old established commercial real estate investment firm that tried officing in a WeWork location for a while until their new office was ready. I think it does a good job identifying what co-working really is. In the end, it’s a step in a journey – one which rarely ends at a co-working facility.

Why we ‘WeWorked’ and what we have learnt
By Anna Durkie | Offices | 06-06-2018 | 12:52

COMMENT: There is a lot of talk in the property industry about co-working and flexible offices, mostly from people who have never occupied one, writes Evans Randall chief executive Kent Gardner. We wanted to learn from first-hand experience so when the lease on our Mayfair office was approaching expiry, I persuaded my colleagues to leave early and move to a WeWork space until our new premises were signed and ready.

We moved to WeWork to expand our knowledge of workplace trends, effectively disrupting our own business so that we could understand this office sub-sector more deeply. Being a London office specialist, the goal was to further inform our work as investors in the office sector and as creators and asset managers of office buildings.

First impressions
The easy-in, easy-out simplicity of the contract was remarkable. We viewed the space, decided it was what we wanted and by the time I’d got back to my office, the contract was in my inbox as promised. I signed up online and paid one month’s deposit on my Amex card.

The packages are simple and inclusive and we can leave at a month’s notice if we want to. This contrasts sharply with the leasing experience on our new Mayfair office where, as is par for the course for a conventional lease, it took several months to sign.

Disruption
The experience has disrupted our behaviour; it has forced us to make sacrifices we hadn’t envisaged, from getting used to smaller floor space and desk size and the availability of meeting rooms and how all these factors impact our privacy.

Our behaviour has adapted. We have gone largely paperless and discarded clutter from our old office, which has been a difficult transition. We have become closer to our colleagues, literally, by giving up cellular offices and working together in a smaller space. This has been good for integration, especially for recent joiners like John Slade.

We have also adopted “WeWorker” as a term to describe our approach – to sharing meeting space, to joining with guests in preparing our tea and coffee and clearing up our own meeting rooms afterwards. We have consciously made an effort to participate in functions and events and to be “WeWorkers”.
At times we have relaxed our dress code, which though never strict, does tend towards conventional business dress. This has helped us fit in, but we still need to be suited for many of our meetings, so we have stood out a bit at times. John’s classic chalk pinstripes do turn some heads!

The brand
Brand alignment is arguably the crux of the matter. When you move to a WeWork space you assume its brand to a great extent. It’s the brand that signifies or potentially even shapes your business culture and behaviours, to greater or lesser degrees. That won’t suit everybody. We have held meetings here but they have been with contacts who know us well and understand our WeWork experiment. For others, an explanation of our experiment is required.
Our future

We are an established business for whom our own front door and a sense of being well-established is crucial to our brand. There is a big tier of such businesses, especially in the investment world, and a West End address is still an important part of the brand identity.

It remains to be seen whether these disrupted behaviours remain embedded in our culture and operations. I suspect we may revert to type when we move into our new, more permanent space in Mayfair. As Churchill said: “We shape our buildings, thereafter they shape us.”

COMMENT: When Kent initially suggested the idea of moving to WeWork I was against it, writes Evans Randall executive chairman John Slade.

I’d just moved over from a big corporate office at BNP Paribas and didn’t feel WeWork was the right environment for a business like ours. I felt a communal office was a little depreciating and a total disruption to what the office setting is and should be for a top real estate investment house.

After years in the business, you acquire lots of flotsam and jetsam. I’d just had a big clear out before joining Evans Randall and the prospect of moving to WeWork meant this had to be done all over again.

First impressions
Although I wasn’t keen on moving to WeWork, I liked Kent’s mentality on testing the product and found the ease of occupation a real USP. It’s efficient, slick and designed to be so. The service at WeWork is also extremely good, it’s welcoming and helpful. The reception can feel more like a hotel than an office building. It all reflects the brand and encourages people to enjoy the experience. It will be interesting to see how the wider industry adapts to keep up.

Disruption
We had to be really particular about what we could bring to fit into the space. We have 15 people in an office that WeWork says is for 21 and we still feel very limited, which suggests the most suitable type of resident for a WeWork may be digitally based. Although the open-plan layout does not suit the nature of our work, it has been positive for our office culture. I believe integration of our team that could have taken two years has happened in more like four months.

The brand
You are part of WeWork’s brand here and it feels very crowded.

The WeWork brand might suit start-ups and early stage companies but unless you are a large corporate occupier, it’s almost impossible to have your own corporate identity within one.

Our future
I oscillate daily between thinking “this is great” and being sceptical about the concept. I probably sit in the middle now but it has definitely been a more positive experience than I initially expected. In my opinion, WeWork is an office for a journey; it won’t take you to the end game. It’s a transient workspace and feels very much like a staging post.

People are often here on their way to someplace else, so at times it does feel a like a cross between a student hall and an incubator. WeWork still has to mature. I would recommend trying life in a serviced office, although I am looking forward to being settled in our own office again. I had to realise I am not the youngest guy in the office anymore.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

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WeWork – Will it Work in a Downturn?

Post By : admin 22 February 2018 Leave a comment

The New York Times just published a feature on WeWork called The WeWork Manifesto: First, Office Space. Next, the World. It’s a very interesting article about how WeWork has gone from start-up idea to a market valuation of $20 billion in only 8 years.

It’s a very interesting article and I really have to give credit to the co-founders for creating something that appears to be working so well. It’s good for companies to have options. WeWork is one of many providers of co-working space. It’s hip, cool and very open space. There are some real benefits to it – chief among them being flexibility since tenants don’t have to lock into long-term leases.

Co-working providers claim to save companies a huge amount of money while providing flexibility and the kind of space that younger employees want. This is true, but you have to remember that if you rent a dedicated desk in a co-working location, each person typically gets a 4-foot-wide table with another table immediately next to it for another person. So a typical 10-foot-by-12-foot office that you would give a staffer in a traditional office build-out, would likely have 4 people in it at a co-working office. While prices vary by location, those 4-foot tables go for $500 a month. So that one office costs $2,000 a month. It’s easy to see how co-working providers can afford to offer free beer and other amenities.

WeWork has been in business for 8 years now – all of which have been in an expanding economy. It will be interesting to see what happens when the economy takes a dip. I hope they do well, but I’m dubious. Practically every executive suite operator went under in the recession of the late 80’s and early 90’s and landlords ended up taking back the empty spaces left over. Since WeWork members are on month-to-month contracts, they can move out quickly if they start feeling the effects of a downturn and are trying to reduce cost. Thus, WeWork and other co-working providers will lose revenue much faster than building landlords whose tenants are committed to multi-year leases. That will put a major strain on their ability to stay in business, much less grow.

So while a recession may result in tough times for the operators of co-working locations and executive suites as well (think Regus), they remain a great option for tenants who need short-term space for projects or when testing the water in a new market.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized