Forget the free cold brew and pingpong.
WeWork and other co-working companies are today less focused on luring freelancers and young startups and instead are looking to fill entire offices buildings with corporate tenants.
WeWork — which now occupies more office space in Manhattan than any other company — billed its business model as a revolutionary approach to the workplace, with budding entrepreneurs sitting side by side (and sometimes collaborating) as part of a community. The company’s co-founder Adam Neumann — who grew up on a communal settlement in Israel — likened WeWork to a “capitalist kibbutz.”
But WeWork now derives around 25 percent of its revenue (and rising) from housing large offices for staid corporate tenants like IBM, and many fast-growing rivals like Knotel have never even bothered going after freelancers.
As well as offering more flexibility than a typical landlord, WeWork might ultimately end up being less revolutionary when it comes to how the freelance economy works and more transformative when it comes to changing the mainstream office world. It could end up widely exporting an aesthetic uniformity to any office space, no matter what building or city — akin to a worldwide hotel brand, or even McDonald’s. It’s a sea change for the $35 billion company that has transformed commercial real estate in New York. In our cover story this month, reporters David Jeans, Konrad Putzier and Will Parker dig into this phenomenon. Read the story here.
And it’s not just office space, but buildings themselves, that are becoming more interchangeable in a way.
You can order a building from Poland and have it shipped over in pieces, as hotel chain CitizenM did. The company opened the world’s tallest modular hotel on the Lower East Side this fall and is building prefabricated hotels around the world. Check out the story here.
We also examine the trend of iBuying, which further disintermediates local real estate brokers and puts the whole home sales process on the cloud. Rather than listing a property with a broker, homeowners can log onto their computers and get an offer from a iBuying company. In many cases, the company commits to the purchase within days, as reporter Erin Hudson writes. Check out the piece here.
Elsewhere in this issue, we take a look at the tumultuous rise of megatower 125 Greenwich, SL Green’s $2 billion stock buyback and how new office development in the Brooklyn market is falling short of expectations. We’ve also got stories on records being set in the residential market despite a general slowdown and a ranking of top property management firms.