Daily Digest News – March 23, 2021

Daily Digest March 23

Hand selected flexible workspace news from the most reliable sources to keep you ahead of the pack. We find all the latest news, so you don’t have to. Morning and afternoon updates. Stay in the know.

Here’s what you need to know today:

The Wing Switches Up Leadership

The Wing is changing its leadership team after IWG provided the women-oriented coworking club with funding last month.

Sheila Lirio Marcelo, founder and former CEO of Care.com, has been named as executive chairwoman of its board of directors, while Lauren Kassan, cofounder of The Wing and its former chief operating officer, will serve as CEO.

“Sheila has dedicated her career and life’s work to ensuring women have the resources they need to succeed and fulfill their dreams,” said Jess Lee, Wing investor and Sequoia partner. “Not only does Sheila know what it’s like to lead and grow a successful company, she knows the unique challenges that come with being a woman—especially a woman of color—in the workplace.”

Care.com is an online marketplace that helps people find carers for children, seniors and pets.

After the Wing was close to the brink of bankruptcy last year in the midst of the pandemic, IWG invested into the company in order to help it expand and stay afloat.

Last June, former CEO and founder Audrey Gelman resigned after numerous allegations of toxic and discriminatory work culture. 

Credit: The Wing

Knotel Reveals New CEO

Knotel will replace cofounder Amol Sarva with Michael Gross, former vice chairman of WeWork, as CEO.

Sarva, who has served as CEO since 2015, has long been an outspoken critic of WeWork.

In addition to Gross’ new role, his brother Eric will become co-president of Knotel with Yoav Gery, who is the current president of hospitality brand Selina.

Knotel, once valued at over $1 billion, has had a tumultuous year that started with laying off 30% of its staff and furloughing another 20%. Then, the company faced numerous lawsuits from landlords over unpaid rent.

In February, the company announced it would be filing for Chapter 11 bankruptcy, just one example of how the pandemic has ravaged through the coworking industry.

Just last week, a Delaware bankruptcy court approved the sale of Knotel to brokerage firm Newmark.

“Our acquisition of Knotel’s business was driven by the significant role that flexible office solutions will play in the future of the workplace,” said Barry Gosin, CEO of Newmark.

Credit: Knotel

Making Necessary Sustainable Changes To Office Design

Views of the office have ebbed and flowed for decades now. Once it was seen as a place of strict professionalism and cubicle-laden spaces, then it was intended to be an environment with free-flowing kombucha and collaboration rooms.

Now, some analysts are saying that the office is dead altogether. While this is unlikely, one thing that is certain across the board is that offices can have a negative impact on the environment.

Sustainability has long been part of many company’s initiatives, but few have followed through to create an atmosphere that truly does the work to reduce their carbon footprint.

Scientists have indicated that the planet could take a turn for the worse if sustainable action is not taken now, so what can business leaders do to make impactful change? 

For starters, understanding just how much furniture your office needs will be essential. While donating leftover desks and chairs seems great, most of the time these products end up in landfills.

On the other hand, products that are considered truly green are only available from high-end manufacturers, making it less accessible. That is why there needs to be a more structured approach to remanufacturing pieces of furniture that do not compromise air quality during the process. 

However, the fact that sustainability and “closed loop” manufacturing are becoming more aware to the public is promising. This, along with more environmentally-sound initiatives like carbon taxes, will help push the necessary change that needs to occur within the furnishing industry.

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Credit: Unsplash

WeWork Lost $3.2 Billion Last Year

Coworking operator WeWork lost $3.2 billion last year and is now trying to raise $1 billion through a blank-check company.

The company also brought in $3.2 billion in revenue last year despite losing the same amount. However, the revenue loss is actually an improvement from 2019, when it lost $3.5 billion.

WeWork’s occupancy rates fell to 47% worldwide by the end of 2020 due to the ongoing pandemic. Still, the firm has been struggling to pick up the pieces since its failed attempt to go public in 2019.

Now, the company is trying to find another way to go public by merging with a special purpose acquisition company (SPAC).

So far, WeWork has been in talks to merge with SPAC BowX Acquisition Corp in addition to raising money from other investors.

This new deal would value the coworking company at $9 billion, a sharp drop from its $47 billion valuation in 2019.

WeWork has spent the past year letting go of underperforming locations, renegotiating leases and laying off staff in an effort to alleviate its expenses.

In fact, during the third quarter of last year, WeWork cut its cash burn almost in half from a record of $1.4 billion in the fourth quarter of 2019 to $571 million.

Credit: Bigstock

Manhattan’s Office Market Continues To Dip

Manhattan’s office market saw a negative absorption of 10.6 million square feet in the fourth quarter of 2020, the highest recorded since early 2009 during the Great Recession.

According to a new report from Colliers, the Manhattan office sector is seeing increased vacancy rates of 8% and a dip in asking rents to $75.30 per square foot.

Additionally, leasing activity fell by 13.4% compared to the prior quarter to 4.2 million square feet. Now, the leasing volume in the market is at 18.9 million square feet, the lowest level in this century.

However, there is a glimmer of hope in the leasing market, with renewals from NYU Langone totaling 632,628 square feet at 1 Park Avenue, Justworks Inc.’s 270,000 square foot renewal on Water Street and several others.

Credit: Canva

The Post-pandemic Office Will Look Much Different

The idea may seem far fetched, but coming back to the office could be our reality sooner than anticipated.

However, once workers return, there will be massive changes to how things are done, particularly in terms of work arrangements and the technology that is used to conduct work.

So what can we expect from the future of the office and how it will impact the workplace as a whole?

For starters, remote working arrangements are not going anywhere. The past year has taught business leaders how to keep employees engaged and productive, and one of the best ways to do this is offering workers choice. 

Not only has working from home been found to improve productivity, but it also has improved the mental wellbeing of employees.

Although remote working has also brought some spikes in burnout due to the inability to separate work from home, the end of the pandemic could help alleviate these issues.

Still, workers have expressed missing the office in the midst of the pandemic, so it’s important to listen to what employees need and offer them an alternative workplace solution, such as a coworking membership.

That’s where flexibility comes in. Because working from home can lead to working longer hours, it’s essential for business leaders to encourage workers to take time to care for their personal lives when working from home.

This means allowing them to choose their hours and arrangements so they have a schedule that works best for their needs.

Credit: Bigstock
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