Off To Work We Go
Co-working has the capacity to shape not only our offices and the way we work, but our cities as well.
If the phrase “co-working space” conjures an image of toque-topped millennials, sitting on bean bag chairs, sipping all-you-can lattes as they twirl their ironic facial hair and plot the next Facebook, you haven’t seen the Exchange Cowork. The office is in Rosedale-Summerhill, a tony Toronto neighbourhood more known for bespoke suits than hipster flannels. Fittingly, the professionals buzzing about the communal kitchen, with its richly veined marble bar and Scandinavian-inspired armchairs, are more blue-chip corporate than edgy entrepreneurial.
“The design isn’t meant to be overly trendy,” says architect Sue-Jean Chung, principal of Studio JCI who oversaw the project. “It’s meant to be something long-lasting and sophisticated, fitting into the Rosedale-Summerhill context. The operator, Timbercreek, our client, wanted it to appeal to experienced professionals, some of whom might be retired from their long-standing careers in law or banking, but continue to consult and don’t want to work from home.”
Exchange Cowork might seem like a sign that co-working is growing up, shedding its youthful, Silicon Valley roots to fit a more mature clientele. More accurately, it’s proof that the once seemingly niche offering, geared mainly to 20-something start-up founders, is expanding rapidly, diversifying to include spaces for a wide variety of demographics, young and old, across all professions. Between 2019 and 2020, the amount of Canadian co-working spaces grew by a whopping 21 per cent, from 6.1-million square feet to 7.4-million square feet, according to a report from CBRE. Included in the mix are spaces for all industries, including interior designers, architects, tech leaders and finance.
“Even big banks and large consulting firms are employing co-working spaces for some of their staff,” says Gordon Wadley, CEO of Dream Office REIT, a development firm currently completing Spaces Zibi, a massive, 55,000-sq.-ft. co-working project composed of two buildings straddling the Ontario-Québec border, between Ottawa and Gatineau. “The benefit is the amount of flexibility co-working spaces provide. They are, by nature, highly adaptable. That’s why I see co-working as something that will only continue to grow, as the needs of offices continue to change in unpredictable ways.”
The question is, in its ascendency, how will co-working not only shape our offices and the way we work, but our cities at large?
The WeWork Shadow
These days, many people know about co-working because of WeWork, the massive, New York-based startup whose youthful, brightly coloured offices can be found in almost every major city around the world (there are 10 locations in Toronto alone). WeWork first gained notoriety after the Great Recession, when it was founded as a low-cost place for millennials to get a desk (sometimes for as low as $45 a month), network and try to start the next big thing (key for a generation told they would likely never find steady corporate work). Perks included limitless micro-brewed coffee, group yoga classes and after-hours mixers (beer and wine included). In-office technology was a defining feature, including 24-access via smart phone app and high-speed Wi-Fi everywhere. Surging popularity helped WeWork become one the biggest landlords in major urban centres, including New York City and London, England, and is currently Canada’s second largest co-working operator.
WeWork’s notoriety turned to infamy in 2019, though. The company was working with Goldman Sachs on an initial public offering with an expected valuation of $80 billion. Then news leaked about its chronic losses — all those perks were draining the company around US$2-billion a year. Investors were spooked, afraid to buy into another over-hyped company that makes no money (Uber and Lyft to name a few). By the time the IPO was cancelled, WeWork had lost 90 per cent its value, laid off thousands of employees, and was only narrowly saved by its largest financial backer, Japan’s SoftBank, with a $10-billion bailout on the condition senior management was replaced.
All of which might suggest that Canada’s zeal for co-working is faulty, based on bad, dated assumptions that spaces like WeWork spaces make sense. But smart money knows they do. That’s in part because co-working long predates WeWork and has proven to be a highly profitable model.
Take IWG, an international real estate company operating Canada’s largest number of flexible offices under the brand Regus (Regus runs 2.6 million square feet or 34 per cent of the national market, over 10 per cent more than WeWork). The company started offering shared desks and flexible office set-ups in 1989. Back then the users were often solo-preneurs and the self-employed, such as independent real estate agents and HR consultants. For a small monthly fee (also under $100 a month), they avoided locking into long-term leases while gaining access to shared services such as a receptionist, printers and communal kitchens. Bonus: they also had a more professional place to meet clients than their living rooms.
As the number of self-employed workers has grown in Canada, from 12 per cent of the labour force in the late 1970s to 15 per cent today, so has IWG and Regus. Their offices might not be sexy like WeWork (they don’t have free beers or bright colours), but the company is highly profitable. In 2019, globally, IWG posited net gains of $171 million dollars.
Numbers like that, coupled with increasing need, entice office operators and landlords to set up co-working shops. “You can get good returns,” says Wadley of Dream Office REIT. The trick is setting up the office right to attract the intended demographic.
No Common Palette
For architects and interior designers, one of the complications of designing a co-working space is that the set-up must be maximally flexible — accounting for the needs of tenants yet to sign up — while also predicting certain immutable requirements. Even as some features seem highly common between many co-working spaces — open areas with banks of desks where people can come and go as they please — the most successful setups also factor in the unique requirements of a certain industry, honing in to capture one particular market.
Montréal’s Fintech Station, which opened in 2019, is a co-working space devoted specifically to nascent finance companies. Developers Ivanhoe Cambridge selected local interior architects VAD Designers d’spaces to envision the project through a competition of ideas. “90 per cent of our work is offices that we design by getting to know the client,” says Tanya Jacques, VAD’s communications advisor. “At Fintech Station, we had much less information about future users, since most hadn’t been confirmed. So we focused on the needs of the overall fintech community to set our designs apart.”
Walking into the results, visitors are greeted by warm woods offsetting calming grey tones. Green plants are everywhere. The subtle yet earthy palette belies loads of discrete, integrated tech: docking ports and teleconferencing screens are easy to find. The dichotomy is intentional. “We could have fallen into the trap of creating a hyper, digitized environment,” says Jacques. “But we chose to go the complete opposite way. We realized how important wellness is to the community and know that an overwhelming presence of stimuli becomes an obstacle to wellness.”
To build in flexibility, Fintech Station members have options for where to work beyond their own rented desks. “Users can choose to go to work in more than 10 different areas,” says Jacques. “There are privacy booths, collaboration zones with bar-height work benches, multiple types of lounges, meeting rooms, a large cafeteria, the smaller cafe.”
The Collective, Canada’s largest co-working space for interior designers and architects, also opened in 2019 and offers a wide selection of rooms for working. There’s a meditation zone for quiet time, four boardrooms and a meeting area with soundproof walls that doubles as a studio to record podcasts. It’s doubtful, though, that Fintech Station users would settle well into the Collective, because the details of the setup are highly attuned to the target clientele. What would an online investment banker make of the 2,000-sq.-ft. materials library, for example, lined as it is with samples of tiles, wallpapers and fabrics?
“The Collective is both for and by the design community,” says Carly Nemtean, co-founder of the Collective who is herself an interior designer. “We’ve done everything with designers in mind, including having a large area for package drop offs, in case people are having furniture delivered.”
One of the benefits of pooling like-minds into a shared space is that it encourages cross-pollination. “The vibe is collaborative, not competitive,” says Nemtean. “It helps us all to be able to talk about what’s going on, not be stuck alone in an office or at home.” But as co-working spaces are helping to shape different professions, are they also helping to re-shape the urban fabric?
What’s Old is New
In January 2020, WeWork opened its latest and largest location in Toronto, WeWork Hudson’s Bay. As the name suggest, the office takes over two floors in the downtown Hudson’s Bay store opposite the Eaton’s Centre, with some of the spaces — including a signature cafe dispensing cold brew coffees — visible to shoppers as they browse for new bedding or furniture. That might sound strange. But there’s a mutual benefit to both companies, and it’s entirely in keeping with WeWork’s strategy.
Traditional bricks-and-mortar retailers such as Hudson’s Bay are struggling in the age of Amazon, looking for unique partnerships to help them maintain their physical infrastructure. Leasing space to WeWork helps offset the store’s carrying costs. WeWork, on the other hand, has historically looked for spaces like Hudson’s Bay that are traditionally considered Class B, the real estate designation connoting older properties with lower rents than newer, nicer flagships (Class A properties). More than half of WeWork’s spaces are in Class B properties.
The cost-cutting aims of finding and refurbishing older spaces is common among co-working operators. Dream Office REIT’s Spaces Zibi project is a part of a massive new development where modern new condo are rising along the Ottawa River. But the Spaces Zibi buildings themselves are two existing brick structures — disused industrial spaces — not new architecture. Likewise, the Collective, Fintech Station and the Exchange Cowork are all in older buildings refurbished for a new purpose.
From the perspective of pedestrians walking along the streetscape, there might be no noticeable change, beyond the proliferation of new WeWork, Regus and other signage (the Collective also has a bright mural on its face). But in an era where so many old structures are being torn down to make way for new high-rises, and everything is becoming a condo tower, that is a shift — preserving old structures for the purpose of our future, to-be-determined working needs.