As It Makes Moves In Multifamily, WeWork Asks, Won't You Be My Neighbor?

A pair of deals aimed at luring apartment dwellers out of their homes — if only just a few short flights downstairs — suggests global coworking giant WeWork is tapping a new vein for growth in recognition that remote work is here to stay.

The New York-based office space provider announced its first-ever partnership with a residential developer last week, teaming up with Chicago-based Cedar Street to offer on-site workspace as an amenity. WeWork will operate a 25K SF, two-story coworking space in the grand hall of the 12-story Bridgeview Bank building at 4753 North Broadway in the city's Uptown neighborhood, which Cedar Street is transforming into 176 apartments.

The agreement with Cedar Street could be the first of several to come, the company said.

Meanwhile, WeWork announced Sept. 13 it would be collaborating with building management tech company Latch to provide residents of Latch-enabled multifamily buildings in New York City with WeWork All Access — a reflection, Latch said, of "growing demand from workers residing in apartments to have access to a third workspace between the home and office."

“As more companies and individuals head back to the office, we keep hearing the same thing — people want greater flexibility in where, when, and how they work,” WeWork Chief Operating Officer Melinda Holland, said in a statement to Bisnow.

“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.”

Coworking space has become a popular amenity at apartment buildings since the pandemic hit in March 2020, and WeWork's deal with Cedar Street is not an industry first among the nation's top coworking space providers. In July, Industrious was brought on by developer Greystar to operate a 41K SF, 530-seat space at Greystar's Ilume residential project in Washington, D.C.'s Capitol Riverfront neighborhood.

But it is a first for WeWork, which pointed to sharply increased demand among Chicagoans for flexible, hybrid work solutions in the past year as motivation for its management agreement with Cedar Street. According to the company, WeWork All Access bookings at the city's 11 locations rose 147% between January and July of this year; on demand bookings rose 356%.

In regards to the Latch deal, WeWork pointed to a survey showing 92% of Manhattanites worked either remotely or on a hybrid schedule as of early this summer.

Both deals reflect rising demand for remote workspace as employees reckon with their relationship to the office, or lack thereof, in the pandemic’s aftermath. 

Julie Whelan, CBRE’s global head of occupier research, said the idea of having a third place to work complements changing work patterns. 

“I think it really has to do with this idea of creating a frictionless environment. What that means is experiences that are not stressful and do not add additional challenges to people’s day,” Whelan said. 

“The most important piece of this equation seems to be commute times. People with long commute times desire to have flexibility in their workweek and these third spaces afford them that.”

Whelan said with respect to the changing work environment, some landlords are offering larger home workspaces within individual apartment units while others find a built-in third space amenity with a coworking option more suited to tenants’ needs.

“Whether people will go to these third spaces depends on proximity, whether or not the company is paying for it and also the quality of the space,” she said. “People will be much more likely to use a space they don’t have to pay additional fees to gain access to or if their company is paying for it.”

As the 12th WeWork space in Chicago, the 97-year-old Bridgeview Bank building is slated to have 60 private offices with 176 desks, private phone booth offices and kitchen space, with some of the space to be reserved for members of WeWork’s All Access Program.

Cedar Street Managing Partner and Chief Development Officer Mark Heffron told Bisnow he sees flexible office workspace remaining a constant and that “decentralized office trends and hybrid work are making spaces like WeWork an even more important option.”

The Bridgeview Bank apartment building will include 13.5K SF of retail and 19K SF of traditional office space. Restoration of the lower floors is mostly complete and the apartments are now being built, with the project expected to be complete by mid-2023.

Cedar Street bought the property for $18.7M in 2019 and began work on the $58M redevelopment last year.