As the office goes extinct, the WeWork era rises again

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Offices may be over for many workers, but coworking spaces are roaring back.

Over 800 coworking spaces shuttered over the past two years, per flexible workspace tracker Upsuite. Even some of the once-ubiquitous brands, like WeWork and women’s-only club The Wing, were already struggling when the pandemic hit. 

No longer. Old coworking spaces are back to life, and new ones are popping up. The advent of hybrid work and the slow return of business travel have left both middle and upper classes seeking a place where they can take meetings, focus, and find companionship: a coworking space. 

The ultra-wealthiest of them are willing to drop very big bucks on these needs. An exclusive coworking space called Colette that plans to open in Midtown Manhattan next spring will cost $36,000 a year, Bloomberg reported this week. That’s on top of a $125,000 buy-in share price, which can be resold to hopefuls looking to get past the velvet rope—Colette caps membership at 300 people.

Colette will boast 23 private offices, a member’s lounge, and uniformed staff waiting on members. It was developed by billionaire Edmond Safra and private equity investor-turned-restaurateur Juan Santa Cruz in an effort to fill the gap that nearly extinct offices have left for the world’s richest workers. 

Many of those workers keep a second home in the city, but don’t need a full-fledged office, Santa Cruz told Bloomberg. Without a home base when passing through New York, they’ve been taking meetings in semi-public spaces like restaurants or hotel lobbies. 

“So why don’t we develop a coworking club, at the highest level, for people who are used to having an amazing office?” Santa Cruz explains. 

Coworking for all

It’s not just the 0.01%: Many workers are seeking out a space to work alongside others—and maybe snag a free coffee—on the days they’re not in office. Some of them live in a city different from office headquarters, making coworking spaces one of their only opportunities for social interaction.

Case in point: Seattle-based, 20,000-square-foot coworking space Thinkspace is at 100% occupancy as of May, according to its CEO, Peter Chee. On Thursday, perennial coworking space WeWork reported a 37% year-over-year revenue increase, which analysts credit to the hybrid work and short-term lease boom. 

“There has never been a stronger moment for flexible office space,” WeWork’s vice president Robin Cardoso told tech news site GeekWire in May. “The past few years have fundamentally shifted the idea of the office, demanding an entirely new approach to how businesses think about their real estate footprint.”

Unlike most fragile businesses, coworking spaces may stand to build on their momentum, continuing to thrive even in the event of a pending recession. Amid uncertain times, employers and employees alike may gravitate more towards the shorter, more flexible and affordable options coworking spaces offer tenants. 

As Don Morrison, CEO of coworking space TractionSpace, told Geekwire, “The age of the 10- to 15-year lease is probably coming to an end.”

For many offices in major cities, that end is already here.