WeWork has found its next sector of real estate to target after its coworking model disrupted the office market: multifamily apartment buildings.
The New York flex space provider has struck a deal with Chicago developer Cedar Street to operate a two-story, 25,000-square-foot coworking spot in the 176-unit Uptown multifamily project at 4753 North Broadway, Crain’s reported.
Cedar Street hired WeWork to run a coworking space as an amenity for the people who will live in the property, known as the Bridgeview Bank building. The firm, whose CEO is Will Murphy, bought the property for $18.7 million in 2019, when it was a 12-story office building. It is in the process of transforming it into apartments.
The deal underscores the high demand for remote work space as companies struggle to adjust to a hybrid work model in the aftermath of the pandemic. WeWork is working to gain an edge with apartment dwellers that want an office that offers the chance to collaborate and meet with other professionals close to home, and the company sees “increased demand for flex space outside of downtown,”COO Melinda Holland said in a statement.
“As many workers desire the in-person collaboration and connection that the office affords, they also want the option of an office environment closer to home — resulting in increased demand for flex space outside of downtown,” WeWork COO Melinda Holland said in a statement about the Cedar Street partnership.
The Bridgeview Bank building location will be the 12th WeWork space in Chicago. The 97-year-old building will have 60 private offices with a total of 176 desks, private phone booth offices and kitchen space. Some of the space will be reserved for members of WeWork’s All Access program.
Cedar Street, which began work on the $58 million redevelopment last year, said in the statement that WeWork’s space in the residential building “opens up the possibility for future WeWork-managed locations across the [Cedar Street] portfolio where there is demand.”
The Bridgeview Bank apartment building will include 13,500 square feet of retail and 19,000 square feet of traditional office space. Restoration of the lower floors is mostly complete and the apartments are now being built. The project is expected to be completed by mid-2023.
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