Mom-and-pop coworking brands like Primary, which recently saw its 25K SF coworking space in Midtown taken over by Industrious, and BKLYN Commons, have shrunk in the hope of surviving the pandemic. Others have simply closed for good, like The Assemblage, which closed down all three of its Manhattan locations in June, A/D/O, a coworking space for designers and architects in Greenpoint that closed last April, and Ignitia Office, which permanently shuttered in July. While that number pales in comparison to what operators with portfolios larger than 100K SF have given up, it has left a mark. Across the country, 20% of all coworking space, or 25M SF, has closed, according to a January report by online coworking space network Upsuite. Operators with one location in a single geographic market made up 46.4% of these closures, while those in one market with multiple locations made up another 10.2%. Unlike larger companies, many of these small operators do not have enough financial backing to survive, Upsuite’s researchers wrote.
“Us mom-and-pops have worked so hard to have the small piece that we had, and we’re giving back a much larger piece of what we’ve had now,” said Primary co-founder and CEO Lisa Skye, whose company has given back a quarter of its portfolio as it goes through the bankruptcy process. “For the larger operators, it’s a less significant impact.”
A room at Primary, a small coworking company based in Manhattan
In Manhattan, small operators gave back a total of 180K SF in the 12 months ending in March, according to Colliers, a figure that doesn’t include the many operators that popped up in Brooklyn over the past decade, trying to attract the borough’s many startups and entrepreneurs.
Courtesy of Lisa Skye
The downsizing is part of a strategy to rightsize and turn a profit by the end of 2021, which the company is currently on pace to do, according to WeWork CEO Sandeep Manthrani. WeWork is closer to going public now than it has been since its failed initial public offering in fall 2019, when it had an 8.9M SF footprint in Manhattan.
WeWork, the largest operator in Manhattan, gave back, closed or placed on the sublease market nearly 1.8M SF in New York City alone in the last year, according to data compiled by Savills.
Manhattan’s large coworking businesses — its three biggest operators are WeWork, Knotel and IWG — gave back nearly 2.4M SF in the borough over the past year, according to Colliers. But despite financial woes, these companies are still around, and each has paved a path for future growth. “Large companies have the resources,” Global Workspace Association Board President William Edmundson said. “They have the teams they have enough locations where they can call on this group of enterprise companies, they can be a resource for those because they’ve got it locations across the country, whereas a mom-and-pop doesn’t … It’s the scale.”
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