Now WeWork Wants To Build Out Your Office And Run It For You
At a time when more traditional businesses are scrambling to adopt the efficiencies of leaner startups, help is on the way. WeWork is currently in the research phase of a new initiative through which it will revamp companies’ offices for them, remaking them in WeWork’s image and arming them with office-management technology and a cultural attaché.
Chief product officer David Fano and head of product research Joshua Emig unveiled the infant project at a breakfast event today inside a glossy wood-walled WeWork in lower Manhattan. They discussed how they’re planning to move WeWork beyond co-working spaces to help big companies manage their own offices. Initially these on-site services will only be for large companies with 50,000 to 60,000 square feet and at least 1,000 employees. The new offerings would include everything from building out interiors to managing guests, booking conference rooms, coordinating events, analyzing office data on space usage, and providing a human community manager to instill WeWork philosophies.
WeWork has already been quietly offering the services to some companies. It gave no specifics today about when it will ramp up the project.
Fano pitches the concept as “space-as-a-service,” though that’s not an official term. What it means is that WeWork will charge a recurring fee for its property and culture management services. The emphasis here is on helping other businesses attain WeWork’s worker-focused mentality by providing an attractive workspace that is both efficient and provides certain perks—like coffee and snacks. “We’re never going to be a design- and-build firm,” says Fano.
He says WeWork is only willing to architect and construct offices because it has design principles that play into how it manages office spaces. Additionally, he’s not looking to make money on overhauling other people’s workplaces. Rather, he and Emig see it as a way to give customers the cost savings that WeWork enjoys, because of its vendor relationships. The build-out also serves to entice businesses into its cultural management subscription as well as other possible uses for WeWork. As an example, Fano described how it whittled one Chicago business from three floors of office space down to two floors, while retaining the same number of employees. WeWork made up some of the square footage loss by giving the company desks inside of its own co-working network.
The announcement of on-site services comes as WeWork is trying to attract bigger businesses. In addition to offering services inside of buildings leased by others, WeWork is also looking to offer medium to large businesses more expansive offices on its own premises, including multi-floor rentals. It currently has five buildings, which are leased by only one or two companies.
Pricing for the new services are still being developed, though it seems like the company may have to take a very tailored approach to this sort of arrangement. Clients will be expected to foot the bill for renovations and then pay a yearly fee to license WeWork’s software and community manager. In order to get WeWork to redesign an office space, businesses will have to commit to a three- to five-year service contract.
Expanding WeWork in this way allows it to get beyond some of the hurdles it may normally face in growing the footprint of its co-working storefronts. It currently boasts 135 locations and caters to roughly 20,000 businesses, but landlords are not always keen to sign companies like WeWork because of its financial model. “Coworking facilitators are viewed as profiting from the lease arbitrage between negotiated lease rent and the price point charged to users, thus any turn in market dynamics could upset profitability,” noted a CBRE Research report from June.
But by exporting its methodology, WeWork just might open up another avenue for amplifying its reach.
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