8 workspace trends for 2018

Think about co-working in 2017 and one of the first names on your mind is likely to be WeWork. The company is valued at $20bn and is about to become London’s biggest private office tenant. Bear in mind WeWork only launched 7 years ago – that’s phenomenal growth by anyone’s standards.

In the last few months they’ve acquired an education company and a community marketplace, launched in Asia, started a gym chain and got into the apartment business. Questions remain over their valuation and ability to weather a downturn in the real estate market, but right now they’re showing little sign of slowing down.

With WeWork seemingly making all the headlines, what else is going on in the business of workspaces?

Here are 8 of the key trends I see continuing to take flight in 2018.

 

1. Snacking & Space Hopping

For freelancers and soloists in particular there are usually 3 components to a typical week; doing the work, talking about the work, and finding the work.

The latter often means traveling to meet people. Face-to-face tends to be most effective, but shuttling back and forth between meetings is definitely not most efficient.

For those hopping between locations or just wanting to utilise a workspace for a few hours of focused time as and when they want it, new services have arrived to serve this need.

Community_Banner

One example is Croissant. For just over $100 they’ll give you 50 hours per month to be used at spaces across a number of US and European cities.

Whilst their supply of workspaces is still a little sparse at present, and the nature of their pricing model appears to be weighted more favourably towards the user than the workspace provider, the increasingly competitive co-work industry means a growing number of spaces will be likely looking at alternative ways to generate interest and revenue.

Perhaps snacking will become a key part of our (work) diets.

 

2. Keep it in the family

Screen Shot 2017-12-07 at 17.42.48

London headquartered Second Home are shortly opening a new space in the ultra-trendy* Hackney borough of East London.

The area already has a number of co-working spaces available (including a sizeable WeWork offering), so how are Second Home going to stand out?

Easy. They’re installing a fully operational creche service so members can have ‘bring your kids to work’ day, every day.

With terms of parental leave high on the agenda of employers and HR departments, and an ongoing shift towards a more flexible work/life balance, will the in-office creche become a fixture of companies’ perks lists?

It’ll be interesting to see whether the trend of more young families moving away from cities (as has happened in London) will affect demand too.

* I was a long-term resident, which perhaps negates this.

 

3. Values-based workspaces

the-wing-new-york-city

NYC startup The Wing have raised both eyebrows and capital (from WeWork amongst others) with their female-only workspace and members’ club offering.

I’ve had a couple of interesting discussions with people recently around balancing the need for safe spaces vs. providing bridges and access for others to better understand the the challenges that caused these safe spaces to be created in the first place.

Personally I hope they’ll find a way to allow admittance to men from time to time as there’s plenty for us to learn. Maybe that’s for another article…

In either case, we’ll see more spaces appear built on values, interests and passions.I referenced this in a previous post here >

The challenge for these operations will be balancing niche focus vs commercial viability as it’s unlikely most workers will hold memberships to several spaces at once.

Expect The Wing to be one that keeps flying.

 

4. The excess capacity opportunity

Airbnb is the most notable example of a business built around leveraging the excess capacity of an asset class.

Spacious are taking this approach to co-working, operating around the hospitality sector. The NYC-based startup work with bars and restaurants to fill their often sparsely-populated weekday downtime with laptop-wielding workers. Just like Airbnb, it’s one of those concepts that at first glance feels like it shouldn’t work, but Spacious are growing at a fair old clip with a presence in NYC and San Francisco so far.

2.-Appear-Here-Pop-Up-Retail

The recent New York launch of London retail pop-up startup Appear Here plus a glut of ecommerce fashion and lifestyle brands scaling up in the city makes me feel we’ll see Spacious’ model appear more in 2018; less agile bricks and mortar businesses will be looking for new revenue streams as they feel the strain of rising rents, lower occupancy and a continuing shift to ecommerce.

Where else could there be excess capacity to utilise?

If anyone fancies working out of screen 1 at the Union Square cinema next week, I’ll bring the popcorn.

 

5. The branded hangout

7784ff7e7d20e072ec59a70b11b00279

Working out of the local coffee shop? Forget it. Next year will see the rise of the branded hangout space.

On opening in June this year, Ian Schrager’s new ‘Public’ hotel instantly became a destination work and meeting spot for the knowingly cool set around NYC’s Lower East Side.

The Ace Hotel chain have been in this position for a few years of course. Rather than booting out the posse of people taking up the hotel’s lobby space all day for an average per-head spend of 1 cup of coffee, they’ve happily turned a blind eye. Presumably keeping the place vibrant post-check out and pre-check in gives them a nice bump of extra social proof, street cred and the potential for serendipitous collaborations that their brand will be inextricably linked to.

Quickly building their own work/hangout spaces are retailers like Lululemon and Dr Smood. Usually quietly stylised offerings in the basement of their retail operations, there’s definitely still an element of discomfort and confusion around utilising these places to spend a working day. However, they tend to be completely free of charge and in desirable locations – very appealing to the early-stage freelancer or startup founder. Also, anything with a stigma which is starting to disappear is well worth paying attention to, and I’d class these spaces in that category.

What’ll be interesting to see is which other brands jump in and how happy people will be to nail their colours to those office-shaped masts. Not everyone is going to be keen to be hanging out at American Apparel’s co-work, even if the coffee is good.

And yes, this is again connected with filling Excess Capacity…

 

6. Airport lounges

Like a lot of people I find the air travel experience trying at the best of times.

After flying a lot for business, I slimmed down my travel a little and found my loyalty cards getting demoted extremely quickly, along with my air miles being of little value for any of the routes I really cared about. No bueno.

Airports are generally pretty miserable places to spend time, and with the airline business being a notoriously difficult one to operate in, there appears to be some scope for innovation.

Monocle magazine have long been suggesting the growth in kiosk-style cafes, and they’ve made inroads in a few cities with this idea.

Screen Shot 2017-12-07 at 17.12.50

It appears there’s huge scope to serve airport visitors with an alternative to the business lounge, especially as rewards points tier are being jacked up and airport usage is on the up.

Don’t be surprised to see WeWork at JFK or Heathrow in the very near future.

 

 

7. The work club

Football club, member’s club, night club, jazz club. If it’s a club, expect to see it start offering business services to members old and new.

Soccer (football) clubs in the UK are putting community-focused workspaces high on the wish-list for their architects, with English Premier League clubs Tottenham Hotspur and Crystal Palace both with new stadiums in the works.

There’s a ceiling on match day ticketing revenue (especially with serious fan backlashes against recent price hikes – we’re looking at you, Arsenal…), so clubs are exploring everything from VR to branded offices to keep their fanbase engaged and coffers full.

Large

Again connected with fulfilling excess capacity, nightclubs are also getting in on the act. Ministry of Sound in London sold their label business to Sony Music and just two weeks ago committed to a joint venture for their events brand which sees that team move out of the MoS office space adjacent to the legendary night club.

MoS are now actively positioning themselves as a shared workspace provider, and have already been using the cavernous ‘Box’ room of the club for a number of alternative live events. Perhaps there’s another joint venture on the horizon…

 

8. Return of the cubicle

The office cubicle. It’s almost a poster child for what today’s workers abhor; grey, closed, isolated, made of non-breathable fabrics. Surely its death should be cause for celebration?

Maybe not. A number of recent studies have shown that open plan offices have significant drawbacks, one being the difficulty for people to focus. In the days before Slack, WhatsApp and fluctuating Bitcoin prices this may not have been such an issue. Nowadays there’s a very strong desire from a lot of people to mute the noise and do focused work.

This study from furniture brand Haworth digs deeper. Broadly speaking, they recommend a mix of private and open spaces, encouraging recharging, and giving people control on where they spend their time.

We may not see the resurgence of the original office cubicle, but there’s plenty for architects and designers to set their minds to. All they need is a private space to do it…

 

And for your life outside of work…

Just as Marriott hotels are building apartments to compete with Airbnb, luxury residential real estate developers are moving towards the models of WeWork and Soho House – offering full workspaces, libraries, basketball courts, coffee shops and various other perks as part of your ‘living experience’. All at a price, of course.

One of the notable examples here in New York is The Eugene, next to the burgeoning Hudson Yards development.

Screen Shot 2017-12-07 at 17.15.13

In many cases these extra amenities are used as a clever hook to bring in tenants, but in reality get relatively low utilisation. Whilst the financials probably hold up, no one wants to see a bunch of empty common areas in a building, and some of the new build towers already have a ‘investor safety deposit box’ feel as it is.

Will this mean another case of excess capacity ready to be exploited?

It’s meta, but watch out for the workspace provider taking over the running of the workspace.

 


 

Got an opinion? Want to continue the conversation?

Let me know in the comments or drop me a line here.

How to rent an apartment in New York

In mid June this year my girlfriend and I were looking forward to a balmy few months in our beloved pocket of East London ahead of a grey and chilly UK autumn.

By mid August we had a pair of US visas, flight tickets, a trio of removals guys emptying our flat… and a wedding certificate. Suffice to say it was a pretty intense few months.

She had been offered a transfer to New York by her employer and decided to go for it. I decided to go for it too.

Around mid August, as we were getting ready for our visa appointments, I remembered a post that my friend Rik Lomas had written on how he made the move from London to New York. It was full of handy tips, and after my arrival here in mid September I realised there were a few things I could add to help other people making the transition.

There were lots of articles online for US citizens moving to NY, but not many for those of us aliens from outside the country.

This post tackles something that everyone has to deal with at one time or another – finding somewhere to live.


 

If you’re moving to New York from Europe (or in fact almost anywhere) you’ll be shocked at how both expensive and small apartments tend to be here. In Europe, London is often seen as eye-wateringly expensive, but relative to NYC it’s pretty good value. If you’re looking in Manhattan (an even some parts of Brooklyn now), think roughly double London prices.

The New York real estate market is huge (there are several high-end glossy trade magazines sold in regular magazine stores – you don’t see that too often), and despite startups like Streeteasy and Zillow it’s also pretty fragmented. There are lots of non-exclusive brokers, hundreds of small landlords jostling amongst the bigger players, and plenty of differing terms and conditions to navigate. *Startup opportunity here*

We got ourselves sorted with somewhere after searching pretty much full-time for a month. We made quite a few mistakes, got frustrated, angry and bewildered, and considered bailing out and going back to London a couple of times (well, nearly).

Hopefully this short guide makes life a little easier for when you’re making the step into NYC.


 

Property here tends to fall into 3 broad categories:

Co-op:  Nearly 3/4 of Manhattan housing is made up of co-ops.

Co-ops are are owned by a company rather than individual owners. If you’re renting, you’re renting from the company. Co-ops have boards (just like companies) and they set their own approval process and guidelines for building management. Each person/company who owns a unit in the building effectively own shares in the co-op, thus the approval process can be pretty tough on new entrants.

If you’re new in town, co-ops may be tough, although the owner/shareholder should pick up the maintenance fees on your behalf.

 

Condo: Condominiums are a little more straightforward – the apartment is owned by a private individual, although there may well be a board with an approval process.
That approval process will probably have some condo fees associated with it – this can range from $500 to in excess $1500. Watch out for sneaky fees like extra amounts to cover your move out as well as move in.

How strict the condo is will depend on the individual owner and the board. We found that most were pretty strict, wanting to see net worth, liquid assets, annual income and various other things.

In a condo you’ll be renting direct from the owner, which can be good, but it’s worth checking how active the owner is in managing the property and where there is any 3rd party management in the building.

 

Rental unit: From what we could tell, these are basically the same as co-ops but people (usually brokers) refer to them as rental units rather than co-ops. If in doubt, think of a rental unit as a co-op.

 

Now you know what the types of property are, let’s jump into the glossary guide.

Amenities: A lot of the new-build apartment blocks have amenities in the building. These range from a small gym or roof terrace through to full size basketball courts and 80 ft swimming pools. Many of the buildings charge an amenity fee which can be in excess of $150 per person per month. Be careful to check whether the amenity fee is per person or per apartment. These extras can make a big difference. Some of the buildings are moving towards a members’ club style model where they also charge a wider membership fee on top of the rent.

Area: You’re best off spending time looking at areas rather than apartments. This sounds obvious but New York neighbourhoods change immensely even within a block or two. 1st Avenue is very different from 2nd; Chelsea above 27th is a big change from Chelsea at 25th, and so on. We spent too much time focused on the type of apartment as well as the area. We should have optimised for one or two areas and then put the focus only on those, and when I say area I mean 5-8 square blocks, not a mile radius.

Brokers: Aka Estate Agents. I still haven’t figured exactly how brokers operate but generally speaking they will be (fairly often non-exclusive) reps on behalf of a landlord to get a property sold/rented. We were expecting 1 month’s rent or 7.5% annual rent to be their fee but nearly every broker wanted 15% of the annual rent. Suffice to say, you probably want to avoid this. Sometimes you can sidestep the broker, particularly if it’s a new building and they are non-exclusive – just turn up and see the Leasing Agent (see below).

However, brokers can be much more useful when they act on your behalf. They can do the searches for you, find a bunch of properties and arrange viewings. They’ll ask you to sign a 2 page document that’s an NYC requirement outlining agent/tenant relationship. I kicked off the first time I saw this (sorry broker, I was jetlagged) but it’s standard.
Again with this option, you’re probably going to need to pay them but you may luck out and get a ‘No Fee’ apartment. But then of course everyone else is after the no fee options too…

My advice would be to do your own legwork at least to start with, and if you need a broker then choose carefully. Like with all service providers, there are lots of terrible ones, many average and a few who are really fantastic.

Deposit: Sometimes known just as ‘Security’. This is the same as it is elsewhere – a payment to the landlord to secure your lease for the duration. You get it back if the place is left as you found it. Standard deposit is 1 month’s rent, except when you’re seen as being a risk (and being from outside the US is definitely seen as a risk) – then expect 3-6 months and maybe more. Find this out as early as you can – brokers don’t want to tell you upfront but they should be able to give you a gauge on how risk averse the owner is.

Guarantor: We ended up needing one of these. They usually only pop up in the UK for student housing, but here in New York they are far more common. The guarantor is normally an individual (i.e. parent, family friend, boss) who guarantees the lease amount in case the lessee flakes. This person also needs to be a US resident, and sometimes a New York or New Jersey resident. We didn’t have anyone who fitted that profile so went down the corporate guarantor route. This means paying 1-1.2x the monthly rent to an insurance underwriter who then acts as the guarantor. It’s expensive and not every landlord will accept it, but if they do it’s a quick process – we got our guarantee through in a couple of days.

Laundry: In London not many people use the laundrette; most flats and houses have a washing machine and sometimes a tumble dryer too. The US is generally the same, however in New York finding a washer/dryer in-unit is pretty rare. This is especially the case if you’re looking at older buildings. We really wanted to have it and so narrowed our search to properties with washer/dryer. As soon as we expanded our search to properties with laundry in the building rather than in unit things opened up hugely. Get that portable laundry bag ready.

Leasing Agent: Also sometimes known as a Community Manager, these people tend to work at one of the big apartment buildings and are responsible for ensuring the place is occupied with tenants. With most of these buildings you can show up at pretty much any time of day and they’ll be someone available to show you around, or at least give you some info about the available units. There’s also little point using a broker when there’s a leasing agent – unless you’re really happy to pay 15% of your annual rent for no reason.

Search Tools: Streeteasy has jumped out at the main player in the space, but Zillow is trying to get involved too, plus a few other smaller platforms like Padmapper. You’ve also got Compass which is a broker-meets-tech company – they’re pretty slick but be prepared for brokers’ fees. Additionally you can check out The Listings Project for alternative spaces via their weekly newsletter.

Square Feet: The US uses imperial measurements so if you start talking in metres no one’s going to know what you mean. You’ll be able to find out the square footage on most new build apartments as they come with floorplans, but with older properties it’s less likely. Also what is measured as the square footage varies from unit to unit – often perfectly usable living space is written off, or the awkward cupboard is included.

Trade-offs: This was a big headache for us. There were so many variables that it made our search even more difficult; view, size, layout, amenities, location, commute, building size, ceiling height (3 apartments failed here). Best thing to do is optimise for 2-3 things you really need and focus on that. We chose size (650 sq ft minimum) and location (East Village near the 6 train).

Unit: Most properties in apartment buildings are known as units. It sounds a bit bleak and utilitarian but I guess it’s the best description for what is essentially a small box within a bigger box.

Utilities: new builds include heat, hot water. You’ll usually pay for cooking gas and electric. This seems to be pretty standard practice but as always, check!

 

Otherwise, get some comfy shoes, manage your expectations and hit the streets…