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WeWork Edges Into Workspace Management, Wins IBM in the Process

by Jo Meunier
April 21, 2017
in Business
Reading Time: 3 mins read
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It’s been a memorable week for WeWork.

First, IBM has reportedly taken a membership deal for all of WeWork’s 88 University Place in New York. Real estate newswire The Real Deal claims this is the first case of a single corporation taking an entire WeWork space in New York.

Secondly, the flexible workspace giant has announced a new management service that’s set to open the floodgates to more corporate deals.

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The announcement comes amid growing demand for flexible workspace from corporate firms, who are keen to become more agile and reduce restrictive leases and commitments on commercial property. According to Reuters, around 22% of WeWork’s client base is made up of companies with more than 500 people – a segment that WeWork is now targeting for growth potential.

On Wednesday, at a breakfast event in Manhattan, Chief product officer David Fano and head of product research Joshua Emig announced the new “on-site services” initiative, which is set to help firms “reduce both costs and time to build an office, while using an in-house design team that will optimize space and create a floor plan that improves employee interaction.”

It’s unsurprising that WeWork is keen to shift its focus from coworking and serviced office locations into the corporate arena. As we heard last week from Knotel, a managed workspace brand in New York, the opportunities are significant:

“There are only so many freelancers with headphones on that need a desk in a coworking space,” said Amol Sarva, who co-founded Knotel in 2015. “We’re now in 15 locations and constantly adding new residents. We’re growing faster every month; inbound demand is 25x higher than it was last January.”

Asked how he views WeWork’s new management service initiative, Amol said:

“With its Enterprise offering, WeWork is jumping from standardized coworking spaces to a space that has traditionally belonged to large brokers, and they are actually serving large corporations fairly well with this.”

Whereas WeWork is targeting large corporations, Knotel is currently focusing on medium-sized firms that are moving through a progressive growth phase.

“Most businesses don’t look like Microsoft. Here at Knotel, we serve the needs of growing SMBs that require higher velocity transactions, more frequent moves, and greater flexibility,” although he added that they are “regularly contacted” by large corporates too.

“Our business in 100-person companies is just on fire,” Amol added. “We are announcing five new buildings this month.”

As for the specifics of WeWork’s new management service, Ruth Reader, reporting for Fast Company, said:

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.

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.

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.

Featured image: WeWork’s Fulton Center, New York City

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Tags: SMBs
Jo Meunier

Jo Meunier

Jo is Allwork.Space's Senior Editor for the UK and Europe. Jo has worked within business centre and coworking circles since 2009, researching and contributing written features for numerous industry publications. She reports on the latest market news and delves into local issues with one main objective: to champion the flexible workspace industry and its members.

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