If you know anything about WeWork, you probably know that this Bay Area former unicorn fell from grace. But WeWork is still going fairly strong after a bailout from SoftBank Group and is positioning itself to be on top once again. How? By enlisting heavy hitter JLL to fill up all those vacant office spots. So what's the plan, and will it work?
WeWork has partnered with Jones Lang LaSalle (NYSE: JLL), a global commercial real estate services company, to help lease WeWork's co-working and flex spaces in 38 locations in seven big markets:
The pandemic put a real kink in businesses that rent office space. GlobeSt.com reported leasing volume was down 92%. With COVID-19 cases waning, people are starting to return to the office, including renting co-working spaces, but when your industry is down 92%, business probably won't return to normal right away. So help from an industry giant of the caliber of JLL is probably a good plan.
JLL and WeWork plan to capitalize on the flex part of what WeWork offers. The message seems to be focused on the flexible nature of the model more than co-working space. Why? Because most people still don't know exactly what to expect about returning to the office and might be gun-shy as a result.
WeWork's flexible spaces and terms serve people who might be testing the waters. Says Howard Hersch of JLL in GlobeSt.com, "Information on employee sentiment, vaccine distribution and the impact of variants continues to evolve -- and this makes flexibility a key component of success."
A report on flex spaces
JLL found that flex space is popular now and should gain even more popularity in the near future. A survey JLL conducted of 2,000 workers found that two-thirds of respondents want to work in different types of locations -- to have more flexibility in where they conduct business.
But what is flex space, exactly?
Flex space, short for flexible office space, offers businesses the opportunity to customize the office space to meet their needs. It's designed to be changeable to grow with a company or to accommodate a new tenant. Flex space generally has a combination of warehouse and office space under one roof and attracts tenants like manufacturers, auto shops, artists, breweries, medical research facilities, small businesses, and more.
WeWork's flex spaces are geared more toward white-collar office workers who need a dedicated space for rotating teams or for having multiple offices in one building. WeWork's flex spaces also allow decentralization from the home office by allowing staff to work closer to home by having multiple satellite offices, providing a better option than working from home for people whose homes aren't ideal for getting work done.
The Millionacres bottom line
People often say, "What doesn't kill you makes you stronger." Is that the case with the pandemic and WeWork? As companies look for a flexible, budget-friendly solution to return to the office, WeWork and JLL are working to stand out as the solution. WeWork is still one for commercial real estate investors to watch.