This Coworking Owner Takes A Different Approach To The Leasing Game

Lawson Gow saw a gaping hole in the Houston innovation community, which lacked the infrastructure and tools to thrive and expand.

Seeking to provide a solution, Gow, an entrepreneur with a background with global venture capital group KPMG Capital, launched a massive innovative hub, The Cannon, in West Houston. 

The Cannon, for many reasons, is nontraditional compared to the proliferation of coworking platforms.

While touting many of the customary amenities such as open and dedicated offices and activity rooms, the site will eventually resemble more of a college campus with micro-housing, retail, a church, green space and other support facilities.

Opening in June, The Cannon, a 120K SF facility at 1336 Brittmoore Road, will offer 131 offices, 300 open and dedicated desks, a movie theater, a game room, event space, a full-service kitchen, and a health and wellness center. Last year, Gow also launched Cannon Ventures, an investor network and venture studio program that helps raise money and grow startups. 

The Cannon team is nine people with experience in business development, strategic and community partnerships and marketing, according to its website.

Most coworking facilities are within office buildings, but The Cannon is a stand-alone building on 32 acres near Beltway 8 and Interstate 10. It is 16 miles from Downtown, a strategic decision by Gow to provide a coworking option outside of the urban core. 

Gow purchased the site, home of a former pipeline manufacturing company, in May 2017. The deal included a 1950s office building and warehouse.

The company rehabbed the existing 20K SF office facility, dubbed The Waiting Room, and entrepreneurs and startups began to occupy space in November 2017. The firm is redeveloping the 120K SF warehouse space as the official campus for The Cannon. It is 76% leased. 

Gow is also launching satellite campuses of The Cannon, including a location at 675 Bering Drive in the Post Oak area. He is in talks with Houston property owners in East Downtown, The Woodlands, The Heights and Downtown. 

Different from traditional coworking agreements, The Cannon is not a tenant in these deals but manages the space, Gow said. The Cannon will design the coworking facilities and then will be responsible for populating and managing the space. The property owner pays a monthly management fee. 

"There is no tenant," Gow said. "No one is signing a long-term lease. We are not the tenant. We are a management company that is in charge of making sure there are bodies in the space."

Instead of having one company take 16K SF of one floor for 10 years, The Cannon will have about 40 companies renting out desks that will generate a larger chunk of revenue, Gow said. 

"[Property owners] don't get that long-term lease, but they are paying us to make sure there are always people in the space," he said. "Those people are renting desks directly from them, which is very nontraditional for commercial real estate owners." 

Bisnow sat down with Gow to discuss his mission for The Cannon, how the facility is a part of a broad push for innovation in the city and how coworking is a solution in a struggling office market. The Q&A has been edited for brevity and clarity. 

Bisnow: What is the vision for The Cannon? 

Gow: The vision is building up Houston's entrepreneurial community by developing the biggest coworking space in the world at 120K SF and bringing classes, speakers, events, programs, accelerators, mentors and investors — a density of all the infrastructure these entrepreneurs need. Houston has historically lagged when it comes to building these startup communities. That is what we set out to do. 

Bisnow: Do you consider The Cannon a coworking space? 

Gow: I consider it coworking as a means to an end. We have no desire to be a coworking space, but what we want to be is a coworking space geared toward entrepreneurs and surround them with all of the support and infrastructure for them to succeed. You can call us coworking if you want because the officing and month-to-month model is akin to coworking. But, that is not what we are or what we aspire to be.

Bisnow: How does your tenant mix promote innovation?  

Gow: We have a diverse community in terms of industries represented. We have blockchain, cryptocurrency, gaming, sports tech, oil and gas and health tech. We believe innovation happens when you put a bunch of people from a bunch of backgrounds in the same room together. The way that The Cannon is contributing to the development of the innovation economy in Houston is by providing a home base for all these different startups. 

Bisnow: When did you buy the land and know it was right? 

Gow: We closed on the land in May 2017. We had a frantic race to get this run-down old office space open. No one had walked in here in three years before we bought it. It was built in the 1950s. We got it to the point where it is just good enough. We launched The Cannon in November 2017. 

Bisnow: The location of the Cannon is away from Downtown and the burgeoning Innovation District; was that intentional? 

Gow: We spent a long time trying to find the right location. We found that the average entrepreneur doesn't live in Downtown. This is inconvenient for some people like those from Montrose, East Downtown or Midtown. But there are 2.5 million people who live in Spring Branch, Sugar Land, Cypress and Katy that cannot go Downtown. There was nothing here.

With that being said, we are still not convenient for everybody in Houston. We have started the development of satellite locations. We are opening locations in the Galleria area and on Main Street in Downtown. 

Bisnow: How will the satellite locations work? 

Gow: As a way to expand beyond the main campus, we created a management model, where we are experts in building communities and the operational programming that goes with that. We will give you an out-of-the-box, turnkey coworking solution. Property owners don't have to do anything: just pay us a management fee on a monthly basis to populate the space. This is a new thing that traditional building owners are not used to doing.

That is a much different approach than what WeWork does. WeWork is the tenant. We are not the tenant. We have created a management model similar to what hotels do. We are responsible for populating and operating the space.

Bisnow: Why did you take this approach?  

Gow: I didn't want to create a chain of coworking spaces, where we have millions of dollars of rent due every month. We are experts on building community and populating the space. You have space and you cannot fill it: Just pay for us to do it.  

Bisnow: Office vacancy has skyrocketed in Houston. How does coworking help the office market? 

Gow: Coworking as a phenomenon is exploding all over the world. Houston is a little bit behind. The percentage of square footage that is coworking in Houston is very small. What is happening in Houston is a dual phenomenon: one is an explosion of coworking spaces and the realization that this is a cool way to work, coupled with the fact that everyone has a lot of space and building owners need to get creative in how they are filling that space. To many, coworking is the way to do that.