US Coworking Firm Now Caters to Its Clients' Kids

As the pandemic takes a toll on the U.S. coworking industry, one shared office provider is adding an amenity for members who need a place to put their child when working outside the home.

Dallas-based WorkSuites plans to try to keep clients and lure new members by offering free office space for their kids as school districts delay openings or teach online. Other coworking companies may follow suit by trying to appeal to professionals who are now choosing a kitchen table over communal office space in a pandemic, said Giovanni Palavicini, an Avison Young principal who specializes in flexible workplaces.

Professionals frustrated with the pitfalls of their at-home setup, ranging from dog barks to doorbells to congested internet bandwidth, are willing to consider coworking with the right amenities, said Palavicini.

"People are having to shift and adjust to the new life we are all living now," he said. "The home schooling and virtual learning is a big one, with professionals trying to figure out what to do with their children. I think WorkSuites is being extremely creative in how they are doing it and I think other operators are going to be doing the same thing."

The new service shows how providers of shared office space are having to adapt to a pandemic in which communal offices are now something some office workers seek to avoid because of the risk of contracting coronavirus. Major coworking firms such as WeWork, Industrious, Knotel and International Workplace Group have been laying off workers, curbing expansion plans and canceling large leases during the pandemic as office workers avoid communal workspaces.

Giving up space is a new focus among coworking providers. Brokerage services company JLL predicts one-fifth of the nation's 4,500 coworking locations, representing 25 million square feet, could close or change hands as a result of the pandemic. If that becomes a reality, it could affect an office real estate market that's already been thrown off kilter by the pandemic.

Against that backdrop, WorkSuites is embarking on its new service. The company requires reservations to bring a child or a group of siblings to the shared office space and there's a limit on the number of hours and days it's being offered. The company's founder says it has already gained some traction with customers.

"We are turning newly vacant offices in what used to be a full location into a Zoom room for kids to offer our clients flexibility," said Flip Howard, founder and CEO of WorkSuites, in an interview. "This allows clients who want to come into the office for a meeting or to host a video conference for a child to go into an office and either watch a movie or do some virtual education."

New Challenges

While other coworking companies may be offering this service on an ad hoc basis, WorkSuites is formalizing the process. Palavicini and top coworking industry executives said they haven't seen this child space amenity offered anywhere else, so WorkSuites may be forging some new ground.

As a result, the concept of bringing young children into a workplace with distracted parents could pose initial challenges, from disruptions to other workers to parents trying to keep track of kids who aren't quite as nearby as at home. And children aren't at school because public health officials determined the risk of spreading the virus by putting kids in one building is too great, a concern WorkSuites will try to avoid by having kids only share an office with family members.

Even though Palavicini doesn't have children, he adds that he knows from his limited experience with his 13 god children they are often the carriers of illness as their young immune systems grapple with whatever germs might come their way. But, in a pandemic, a sniffling child might raise some alarm bells with coworking members.

While WorkSuites' plan is focused on members in the short term, another coworking provider CEO said he's staying focused on long-term strategy. Nick Clark, founder and CEO of rival shared office space provider Common Desk, said offering space for clients' children is a good idea, but not one he expects to copy.

"We could spend a lot of time working through something that might make us a little money in the fall, but it would take away from what we are building in 2021 and 2022," said in an interview. "I do think there's a need for giving parents a place to work with kids, I have a four-year-old at home, but we have a nanny in place and we have been able to make it work."

At WorkSuites, children must be at least seven years old and location managers must approve bringing multiple siblings, said Tosha Bontrager, a senior director of product and brands, who came up with the idea. Each child or sibling group would have their own separate work room, with the goal of keeping it a professional work environment with flexibility for parents rather than a daycare, she said.

While WorkSuites said it has increased its cleaning protocols like most office providers, it does not have any children-specific sanitization plans in the works.

WorkSuites, which has about 20 locations in Dallas-Fort Worth and in Houston, is one of several coworking providers that have eliminated their hot desk membership, where multiple workers share the same desk, as the need for being socially distant in the workplace has become the norm.

Palavicini said he's already seeing some coworking operators begin to hand back space to landlords, a move he expects will keep going.

"Many of these groups were overzealous to make deals and so we are definitely going to see a shift from these bigger groups giving deals back and slowing down their growth projections," Palavicini said. "We are also going to see some acquisitions and mergers and some groups will go out of business."

The pandemic could lead to more suburban locations for coworking providers, connecting different companies and their employees from afar without the need for a central office, he addsi.

Another coworking provider, called Fuse, said a coworking location in Prosper, Texas, a suburb about 35 miles from downtown Dallas, has stayed at 80% occupancy throughout the pandemic, partly because it's the only coworking option in the growing North Texas city, said Palavicini, who was involved with Fuse's lease in Prosper.

Even without the pandemic, Common Desk's Clark said various coworking providers would have been handing back space to landlords and downsizing expansion plans because the industry was already in "such a frothy market," with "so many coworking brands signing leases at the top of the market in locations that didn't make a whole lot of sense." The pandemic simply sped up the space shake out, he added.

"We are going to continue to see space come back online, with some operators out there raising too much money for their own good," Clark said, adding his rival WorkSuites has done well by signing the right leases at the right time. "There are companies that built out nice coworking spaces with economics that didn't make sense in the first place. They had a lot of powder to deploy and that's where they started making mistakes."

With tight margins, Clark said he's expecting to see some coworking brands, especially franchisee brands, give back space soon. However, for those that survive, he said he expects a "surge of demand for flexible office space in the next few months," as companies looking for alternative ways to get employees safely back into an office situation, even if at a distance and maybe not at the same location.

"As soon as leases start rolling, I think we'll see a flight to coworking space with flexible offerings," said Clark.