Once the domain of barefooted techies and former frat bros working the phones between beers, the next-gen of co-working spaces are slapping on a suite and tie and rebranding.
“Our spaces are elegant and sophisticated,” said Thiago Viana, head of communications at WeWork. “There’s no more beer on tap.”
Sobering up means structural changes, too. WeWork says that open floor plans where workers are crammed against strangers in long rows of desks are going the way of the rolodex.
“If you walk into any WeWork in New York City now, there are private offices, there are conference rooms and private floors,” Viana said.“[We] are getting new spaces that are high level, state-of-the-art, but keep the WeWork spirit.”
Demand from bosses and workers for “ready-to-go offices,” swing space and short-term workplaces is strong, according to broker Adam Henick of Current Real Estate Advisors, thanks in part to new artificial intelligence and finance companies that are uncertain of their future growth.
At the same time, co-working space for teams of 30 or 75 people is scarce in the city. That’s the niche in the market that WeWork is now trying to fill, says Henick.
A new WeWork recently opened at 250 Broadway near City Hall with another coming to 245 Fifth Ave. in the Flatiron District.
An even more upscale version of WeWork is coming to floors 9 to 11, and 15, at 511 Fifth Ave. at East 43rd St. WeWork will also manage that building’s amenities.
But WeWork isn’t alone in it’s attempt to upscale co-working.
There are currently 132 co-working spots in the metro area offering at least three high-end amenities, an analysis by Yardi, a real estate data and analytics firm, found.
“People would walk in and say, ‘This is nice, but do you have something more upscale?’” said Adam Stark, CEO of Stark Office Suites. His company operates co-working locations on high floors at One Grand Central Pl. and 110 E. 59th St.
But the one on the 23rd floor of the Durst Organization’s 825 Third Ave. is for his newer high-end “Excelsior” brand.
“We filled that in record time,” Stark said of the private Excelsior offices. “They flew out the door.”
Stark’s latest play is a recently opened duplex with 17,291 square feet of interconnected workspace on the 12th and 14th floors (there is no 13th floor) at 717 Fifth Ave. across from Trump Tower.
Midblock views from 717 extend north towards the General Motors Building at East 59th St., while the Excelsior’s windowed offices also overlook Fifth Ave. The corner conference room amenity was previously used as the private office for the CEO of the Chinese firm that owns the building. That company moved its own offices into the Waldorf Astoria after completing its redevelopment.
“The folks downstairs [in the lobby] have a little bit of the Waldorf hospitality flair,” Stark said.
The space includes 27 private offices, executive lounges and conference facilities. Introductory rates range from around $5,000 per month for a windowed office of approximately 125 square feet to $17,500 for the largest 375-square-foot corner offices that can see Central Park.
Desks for assistants line the corridor along with a shared copy machine and large pantry. There are also large team rooms, smaller offices with no windows and phone rooms for those who want to make private calls. By early October, 35% of the offices were filled. All workers also have access to the building’s other upscale amenities.
The Excelsior buildout was designed by TPG Architecture to target established professionals, family offices, investment funds, entrepreneurs, specialty attorneys and international businesses seeking a more private and premium environment than they could find at other co-working locations.
Typical agreements with tenants run one to five years, with two years described as a common sweet spot. Stark’s own Excelsior lease runs for over 21 years.
A few blocks south, the new Industrious Reserve at Lever House at 390 Park Ave., is a hospitality infused standout co-working hub. Located on the connected fifth and sixth floors, most of the small private offices can see up and down Park Avenue.
While the two Industrious Reserve floors have their own cozy seating and café areas, all workers also have access to the elegant, 3,500 square-foot Lever Club on the third floor that has two huge outdoor terraces and multiple indoor spaces along with bar and food options.
Pricing for the Industrious Reserve spaces range from $4,000 monthly per desk to $17,500 monthly per desk — and average $7,500 monthly per desk.
“If someone doesn’t want or need an office and just wants to work in the common area, we offer an access membership for $3,000 per month,” explained Jamie Hodari, co-founder and CEO of Industrious.
The space features private phone booths, and along with the de rigueur high-speed Wi-Fi, members get unlimited color printing, office supplies and several hours of private meeting space each month.
“For Park Avenue, relative to the competition, it is definitely competitive,” said Shiv Rana, CFO of Industrious and Building Operations and Experience for CBRE. CBRE has a large stake in Industrious and occupies the lower four floors for its global financial headquarters. “There is elevated design and more social networking.”
