Yeah, this is a fair point, but aren't WeWork prices pretty exorbitant when compared to just renting some real estate through more traditional methods (i.e. an agent)?
Renting from a coworking space (We've never used WeWork but have multiple others) is generally month-to-month with a one-page contract and I can pay with a credit card.
Getting an office lease is a huge process with a stack of contracts, pushy agents, ridiculously long leases, misleading prices, hidden costs, furnishing, and establishing all the necessary services. And if you're a small company, the owners are expected to personally financially guarantee the lease.
they provide a lot of "value add" through economies of scale (happy hours, pizza parties, mini conferences, stocked kitchen, random little "perks", etc) which are factored into the cost, but require no talent or time overhead for the client companies.
Think of it as "sexy startup office as a service."
Not saying it's a worthy or necessary service this world needs, but I think that's the value they provide and what companies pay for.
Sexy startup office as a service is exactly what it is.
The prices are eye-watering, however, and don’t seem to come down much with scale. (A three-person office is about three times the price of a one-person office – at least when I last checked.)
WeWorks "scale" is 10-person company got their Series A and wants a (semi) custom build-out for 90 people + (private) conference rooms, or a well-funded startup wants to setup satellite offices.
They may be but corporate landlords want fairly long term leases. I recently tried to find an office for myself and had trouble finding 'official' office buildings that would do less than a 3 or 4 year lease. If I had a WeWork locally I believe I could do much shorter leases for a small office space.
I just rented a small unfurnished appartement and use it as my office. There really isn't much of a market for small offices, but there are plenty of small appartements.
Yeah, as soon as you start taking meetings or hiring employees you quickly start breaking insurance, HOA, and zoning. And quickly have to register your business with the city or risk serious fines.
If it's your second home that you have your morning coffee in and have a personal office that you do non physical tasks on, and occasionally have a friend or cofounder over for a beer you're looking pretty good.
In my experience, commercial agents are looking to close big 10+ year leases, not chase down sub-leases from firms with a little extra space for 6-8 guys.
I found a non-weWork type small office building, 250 private sqaure feet, one year minimum lease, cooler neighborhood and 75% the cost of any of the WeWork (et al) type places. We've got a 12 person conference room and three more counting the coffee places and restaurants that have private/reserved area that are all within two blocks. I just didn't want to be "downtown"
The standard in (US) commercial real-estate is triple net [1] at 10+ years. Everything else is basically a sublet in someone else's office...e.g. WeWork.
leases are really messy. In the US you have leases with lockin, and in places like Japan where you can't force someone to stay in a lease, they instead force you to put up something like half a year's rent(!) as a security deposit.
