South Bay cowork spaces plan post pandemic rebound
by Jake Safane
Ego Alpay drew upon his experiences hosting small, artistic parties during his time as a professional basketball player in Turkey to open three coworking spaces for businesses and independent creatives. He named his company Unita to emphasize its focus on community, though the El Segundo, Manhattan Beach and Hermosa Beach locations each have their own unique artistic flair and history.
Before the pandemic, Unita had approximately 200 members. Now it has a few dozen.
“When you’ve been building a community that includes cheering and hugging and working together, and then the [government] comes in and says you should not leave your home, I don’t even know how we continue,” says Alpay.
Fortunately for Unita, and other coworking spaces, Los Angeles County’s recent move into the orange tier of COVID precautions means that non-essential offices can operate at 50 percent capacity. However, the county still encourages remote work for the time being, and even when more people are vaccinated and are comfortable returning to offices, the coworking landscape may look quite different than it did before the pandemic.
“I see it changing eventually, someday, but even if it does change, the world is no longer turning [the same] way,” says Alpay. While there may be people looking for community, he says, the broader commercial real estate market isn’t going to stand by idly.
The pandemic has caused significant commercial vacancies, and many businesses are questioning what they’ll do when their leases expire. “Commercial office spaces will be trying to lure back tenants however they can,” says Alpay.
Some of these spaces, including those operated by large coworking companies that may have more runway from investors, will be able to discount rents enough to incentivize people to return to offices. Smaller coworking spaces, without substantial financial backing, will have to compete based on factors like flexibility and the local community they foster.
New ways of working
In one of the many ways that the pandemic has upended the world, a wide spectrum of businesses has started to rethink their workspaces, long-term. Some large companies, including Facebook and Twitter have said employees can work remotely forever. That could prompt some workers to live far from corporate headquarters and use a coworking space nearby. Some businesses are also planning to move out of commercial offices into coworking spaces, where employees could come in a few days a week and work wherever there’s an open seat (known as hot desking).
However, notes Alpay, these shifts will take time, especially for large corporations that have multi-year leases they need to complete. Still, some coworking spaces have started to see signs of a turnaround.
“Since February we have seen a significant lift in interest from companies of all sizes, particularly in the Los Angeles market,” says Elton Kwok, territory vice president for California at WeWork, a global coworking company that has locations in Manhattan Beach and El Segundo.
Smaller coworking spaces are seeing signs of life too.
“We’re trying to get back on track. Slowly, people are looking to return, and new members are coming in, with some employees looking for a space to work, instead of at their company’s headquarters,” says Sandra Plata, co-founder of Cowork South Bay in Torrance.
“I honestly think that coworking spaces have a future, especially now that a lot of corporations have canceled their leases, or plan on not renewing leases,” she says. “The amount of money corporations are going to save on headquarters is going to be tremendous, to the point where they may be okay paying for an employee’s coworking membership. So I think the opportunities for coworking spaces could be good, because [the pandemic] has opened up a new way of working.”
Plata has recently had companies based in both the Boston and San Diego areas send nearby managers out to scope out the space and test their internet reliability so that they could then sign off on securing space for a few local employees.
So, the future of the South Bay economy doesn’t necessarily need to hang on more companies being based here. Instead, more people could end up working within a few miles, or even a few blocks, of where they live, whether that’s for a company based across the country or for one in Southern California.
That proximity advantage could be particularly important to working parents, exhausted from a year of running both schools and offices from their homes. As some sense of normalcy returns, parents may want to be able to get out of the house for a few hours during their children’s daycare or school days, but still be close enough to easily pick them up.
South Bay parents also have a new option to consider with the recent opening of MESH Space in Redondo Beach. The business started by the founders of MESH Kids (a children’s play equipment rental business in Southern California), combines coworking with a coffee shop and childcare, giving parents a space that they can comfortably bring their kids and get work done.
The March 2020 start of their lease was far from ideal. Their contractors came down with COVID, delaying construction. A full year later, the coffee shop has now opened, and MESH Space is starting to accept coworking memberships. Yet, the pandemic has had its silver linings, sparking more long-term opportunities for the business.
“What I anticipated a year or two ago is now totally different,” says founder Eunice Ong, who grew up in the South Bay. “Now, with a lot of kids doing hybrid learning and a lot of parents who were not remote before, but now are permanently or partially remote, that’s going to cause a lot of folks to need drop-in care, or drop-in offices, versus a more permanent situation.”
Leaning into flexibility
Part of what often makes coworking spaces attractive is their flexibility. The spaces are often physically adaptable, with rooms that can be adjusted to run meetings, produce podcasts, or host wine tastings. Members can work in a private office, at a hot desk, or in a comfy chair in a lounge space.
Coworking space memberships also tend to be more flexible than traditional office leases. Many offer month-to-month memberships, a stark contrast to multi-year commercial leases.
In some ways, this flexibility backfired during the pandemic, because people were able to pause or cancel their coworking memberships. That left many coworking spaces short of covering their own commercial leases.
Yet these hardships have largely been an anomaly caused by the pandemic. Going forward, coworking flexibility will likely be an advantage.
“Flexibility is at the core of what we do,” says WeWork’s Kwok. “It is a competitive advantage that has become increasingly important in recent months. As businesses navigate how to operate amid the continued uncertainty of the pandemic, access to clean, flexible, and turnkey workspace is a top priority.”
As part of adapting to the pandemic, WeWork has launched a new type of membership called All Access. Members pay a monthly fee for use of spaces around the world, rather than being tied to one location.
Some local coworking spaces have also been able to be flexible with their services.
Unita’s Alpay tells local companies, “You can keep your surfboard in our Hermosa location, do a podcast in Manhattan Beach… and have a 40-person meeting in El Segundo.”
When COVID hit, Cowork South Bay launched virtual offices to provide companies with a local mailing address — something that larger coworking businesses typically offer, but which was new for this particular coworking space. Cowork South Bay also leaned into digital offerings, like a Slack channel for members to connect with one another. Plus, they have co-launched a podcast, South Bay Creatives, alongside Ruben Pereida, founder of local marketing firm Vintkona. The podcast profiles local entrepreneurs and creatives while providing business advice.
“The fact that we have members staying doesn’t mean that we get complacent,” says Cowork South Bay’s Plata. “We always keep adding value to our members.”
At MESH Space, as pandemic restrictions recede, flexibility will be key to building their business, from working out custom membership terms to figuring out how best to use their hybrid space.
“It’s really fluid,” says Ong. “We’re just going to see what folks really need.”
With higher capacity allotments and people starting to venture out socially, coworking spaces may be able to also regain business by creating the community connections that so many crave. Even before COVID, many coworking businesses stood out from traditional commercial offices by having more of a community component.
These spaces house several different types of businesses under one roof. You could bump into an accountant one day, a non-profit founder the next, and a T-shirt designer the day after. Many coworking spaces bring people together, by hosting happy hours and partnering with local businesses for pop-up events, which sometimes are open to non-members too.
“I’m really, really excited to do more things like that,” says MESH Space’s Ong. “That’s where my heart is, bringing people together, bringing community together.”
Community-building programming and offering space for people to connect can yield a wide range of benefits. It’s not uncommon to see members trading business advice or securing new clients, such as when members share that they know someone in need of, say, a graphic designer, or when the coworking spaces themselves highlight members on their own social media channels.
“We’re always trying to promote our professionals,” says Cowork South Bay’s Plata. “That’s the value they get by being members, not just that they have a desk and a chair and WiFi. They also have people talking about you and your business.”
There can be a bit of a chicken and an egg problem here, however, because it can be difficult to create community with few members, and it can be hard to recruit new coworkers without already having a vibrant community.
That said, people may be more eager than they have been in the past to seek out community, given the relative lack of socialization over the past year. So while it will take time to get back to pre-pandemic membership levels, there’s the potential for coworking to eventually surpass where it was, both because of the business need for flexible space and the social need for community.
“Coming here and being inspired and working with people who are local, who are your friends, who are your neighbors, with whom your children go to the same school, there’s nothing better than that,” says Unita’s Alpay.
Editor’s note: Unita’s Hermosa Beach location is the former Easy Reader office building and is owned by an Easy Reader family member. ER
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