WeWork is in trouble in New York. Its Dock 72 space – spanning 220,000 square
feet – seems more like a ghost town than a buzzing networking shared workspace.
While it all seemed to be exciting when it opened – and then a few days
following that – that has substantially died down ever since.
Most of the private offices at WeWork
are vacant with WeWork claiming 30 percent occupancy. According to a recent NYTimes article written by David Trainer:
“If the economy stays strong over the next year, it’s possible WeWork could make progress towards profitability. However, it wouldn’t change the fundamental weakness of the business. The company’s strategy of taking on long-term lease obligations and then subleasing for 1-2 years leaves it vulnerable to an economic downturn and falling real estate prices.”
Attempts are however, being made to
save it. SoftBank has agreed to take over
control and make some mega investments, on top of the $9bn it already has. It
is aiming to decelerate its expansion pace, renovate, focus on its primary
markets and more.
But perhaps WeWork is no long “WeWorking.” Perhaps there has been a complete overhaul in attitudes to how we work. That’s what German entrepreneur Lasse Rheingans might have us believe. His idea was recently reported on in a WSJ article, which he is putting in practice in his tech start up firm. He is developing a five-hour workday for employees to arrive at 8am and leave at 1pm at which point they are not expected to do any work until the next morning. BUT, while at the office, the phones must be left in their bags and use of social media is forbidden. Meetings are limited to 15 minutes or less and work emails are only checked twice a day!
WeWork’s mission is to: “create a
world where people work to make a life, not just a living,” but perhaps today
Rheingans has a more practical way of arriving at this goal.
WeWork in Manhattan is today, Manhattan’s “second-biggest private office tenant.” This comes less than a decade after opening its first co-working space in NYC (in the SoHo region).
According to data from Cushman & Wakefield, today WeWork boasts almost 50 locations in NYC, opening 10 new locations last year. This spans 2.9 million square feet in the region. A further five are set to open in 2018. The company has received much support, in particular, from SoftBank’s Vision Fund ($4.4 billion). SoHo has five WeWorks.
Each of these WeWorks features: beer and microbrew coffee on tap; large open common spaces and more. some have special things like photo studios/indoor garden/workout equipment.
What is it like to really live and work in New York? For those thinking about the move, is this really doable? And, if so, is it a real challenge or do the benefits outweigh the difficulties? Here we take a very brief look at some of the factors to be considered.
First off the infamous WeWork phenomenon – that is not news in an of itself – is reaching a new level. Instead of simply using the space for work one can also kinda live there now too with the Financial District’s WeLive phenomenon. Spaces up to four bedrooms large can be rented out for a day or even a year! For those looking for something smaller that is possible too as studios can also be rented for short- and long-term uses.
The advantage of this is that everything comes included – all the silverware, utensils and anything possible that you would ordinarily need to live. You can make use of the bar, laundry room and swimming pool as well; it really has become a home away from home and for those traveling for work who need the space this is a great option. It also works for those considering a more permanent move – of themselves or their entire businesses – to the New York area. It is kind of like a trial to see how working would be in practice.
Another area we looked into was transportation. Reports show it’s actually not bad at all. According to Times contributor Jonathan Mahler, “In New York, movement—anywhere, anytime—is a right.” Unlike some other large cities, there is just one flat fare when it comes to the city’s public transportation – the Metro. So you “don’t’ get penalized for not being able to live centrally.” Which is actually very positive considering how pricey that can be. And that also probably accounts for why NYC has become such a hub of culture.
Where are the highest salaries and best working conditions in New York? We often believe that small firms are the way to go when it comes to the creation of additional jobs. And that might be true. But when one is seeking out the highest salaries and greater benefits, the Scale Up New York report found that the smaller-sized companies require assistance against issues that obstruct growth so that they too may be able to provide higher salaries.
The facts speak for themselves. Firms that employ more than 500 staff members pay an average of $97,839 whereas companies with less than 20 employees pay an average of $49,041. That divergence is way too large. But what happens is, according to Executive Director of the Center for an Urban Future, Jonathan Bowles, is that “small businesses are tripped up just at the point when they try to grow.” One example of this is how hard it is to get the loan that is often required for expansion given the diminishing number of community banks (half as many as there were in 1992).
Microsoft does not seem to have a problem with working in New York City. But there again, that is quite the corporation. In a recent announcement the company said it will be renting office space from WeWork for 300 of its employees in NYC. This is so that it can give its participating MSFT employees a more flexible office arrangement as with this WeWork membership they will be able to choose from 30 different office locations around the city. As CDO of WeWork, David Fano explained, they are “making a big push into bettering our offerings for what we call ‘enterprise customers.’”