The Fall and Rise of Co-working Spaces

Renting a desk might seem absurd — but in a new world of remote work, experts predict a surge in demand.

When the pandemic hit last spring, Rebecca Pan had been at the helm of Covo — a vibrant co-working center in SoMa — for six years. 

But as local public health officials encouraged, and in some cases mandated, that most residents work from home, Pan saw her revenues dry up overnight. Eventually, she had no choice but to close Covo’s doors. 

At the onset of the pandemic, people in real estate wondered whether co-working could survive. The concept, which has grown steadily in popularity over the past decade, has been a vital resource for small businesses, nonprofits, and freelancers looking for flexible office space without the commitment or cost of a long-term lease. 

But as more people started working from home, the number of people using co-working spaces began to fall. The future was looking bleak. 

By April 2020, WeWork — one of the biggest names in co-working — was struggling to make rent across its massive real estate portfolio. The company reportedly approached some of its landlords about rent abatements, revenue-sharing agreements, and other lease amendments to help them get by.

San Francisco, one of the more popular co-working markets in the country, felt similar ripple effects. Before the pandemic, the city had an estimated 3.9 million square feet of office space controlled by co-working ventures, according to CBRE Group. A year later, that number has declined to 2.5 million square feet.

But with vaccination rates climbing, the pandemic has started to wind down and California has made moves in recent weeks to reopen its economy. While some workers have slowly begun trickling back into the office, it appears the traditional 9-to-5 work culture is dead. Some of the Bay Area’s largest tech companies, such as Google and Salesforce, have already announced hybrid plans to let employees work remotely when they want after the pandemic ends.

Colin Yasukochi, the executive director of CBRE’s Tech Insights Center, told SF Weekly the real estate firm expects the increase in remote work could lead to companies cutting back on corporate office space.

“If they’re going to have their employees gather once a week or twice a week, many of them may choose to use the co-working space,” he said. “We see demand kind of rebuilding for this type of space over time.” 

Flexible Workspace

With Covo shuttered, Pan and her co-owners launched a new co-working venture earlier this month called Trellis. In the same brick-and-timber building at 981 Mission St. Pan said she has started seeing a demand for co-working once again. 

With less than a week of being open, Trellis signed contracts for more than a third of its private offices, and people have inquired about using the space for private events. 

After more than a year of working from home, Pan said she believes the professional world is going to see “different patterns than we saw pre-pandemic.” 

“Pre-pandemic, it was very much you’re full time in the office,” she said. “I don’t think that’s going to be the same moving forward. People are really appreciating the flexibility. I think what we’re going to see from the co-working perspective is fewer people going into their corporate campus, but having the workplace flexibility of working from home or a place like Trellis.”

Over at the Hivery, CEO Grace Kraaijvanger hasn’t felt the lull in business she initially expected when she first closed the doors at her Mill Valley and San Francisco co-working spaces last year. While the physical offices won’t open until June, Kraaijvanger has embraced Zoom culture with a whole new kind of co-working. 

About three years ago, the Hivery launched its virtual membership program. The intention was to connect people outside of the Bay Area with some of the events being held at the co-working centers. So when the in-person aspect was taken away, Kraaijvanger decided they were going to go to 100 percent virtual co-working — even if she wasn’t quite sure what that looked like. 

What transpired was something she said felt like an antidote to the isolation, uncertainty, and grief many people experienced over the past year. Aside from masterclasses and other resources to help women start and run businesses, the Hivery offers two 90-minute virtual co-working sessions a week. 

Each session is led by a mentor who opens with a prompt and short discussion to help set an intention for the workday. Following that, members put their mics on mute and have an hour of uninterrupted work time.

“In that time, if you start feeling alone, isolated, [you would] look up at the screen and see that you have a whole community working by your side,” Kraaijvanger said.

As more people become fully vaccinated, and the city slowly breathes back to life, Kraaijvanger said she believes people are craving in-person connections more than ever. 

“There is an eagerness to change the scenery and get out of the house,” she said. “It’s possible that people will prefer co-working closer to their home or flexible co-working or a hybrid of sorts.”

As for virtual co-working, Kraaijvanager fully intends to keep the programming running — especially because it’s grown into a new community of women across the country.

Grace Hase is a contributing writer.

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