Co-Working Spaces Are Reviving Thanks to Remote Corporate Workers

Before the coronavirus pandemic, Andrew Slaughter started his workday battling morning traffic — generally between 15 to 40 minutes — on the way to the LabCorp office in the Research Triangle Park of Durham, N.C., where, as a proposal manager, he puzzled out lab service costs associated with clinical trials.

During the pandemic, Mr. Slaughter worked from home, but he was eager to return to the office, and with good reason: His wife runs a small preschool in their house, averaging 10 children a day cavorting in the sandbox, chattering through snack time and joining in singalongs.

“It can be a little distracting,” said Mr. Slaughter, who sequestered himself at a small desk in his bedroom. “It’s not as though I could go anywhere in the house.”

When LabCorp told its employees they would be returning to the office, Mr. Slaughter found out he had no office to return to — his job had been made “fully remote.” Like many companies, LabCorp reduced office space, having found employees were just as effective — and often happier — working from home.

Eager to escape the daytime chaos of his home, Mr. Slaughter found a solution in a co-working space. The concept wasn’t new: The spaces were already popular as inexpensive ways to rent offices by splitting the costs for snacks, office machines and industrial-grade internet connections. But as the pandemic yielded more remote workers, co-working spaces have found a small but growing market among displaced workers like Mr. Slaughter who yearn for a bustling office removed from the distractions of the refrigerator, the couch, the TV and preschoolers warbling “The Wheels on the Bus.”

Mr. Slaughter chose a property called the American Underground, which is in a former bank on Main Street in downtown Durham.The American Underground offers not only office amenities but also social activities like Bingo nights, happy hours and a snack and coffee bar. (He pays $150 a month for the space.) But for Mr. Slaughter, the highlight was the change in his commute.

“Instead of driving to Research Triangle Park, I can ride my bike here,” Mr. Slaughter said.

While there is a fair amount of research on co-working spaces, most of it has focused on entrepreneurs, who have typically been the primary patrons. But as Travis Howell, an assistant professor of strategy and entrepreneurship at the University of California, Irvine, conducted interviews at the American Underground in an attempt to study those entrepreneurs, he kept finding refugee corporate employees instead.

“At first it was annoying,” he said. “I just took them out of my research because it wasn’t who I wanted. But then I realized this is becoming a thing.”

Mr. Howell has focused his research on those workers, who have grown to make up 16 percent of the American Underground occupants, he said. (Other co-working organizations, including Regus and Expansive, have reported similar numbers.)

Although his research is continuing, it appears that entrepreneurs and displaced corporate workers like co-working spaces for different but overlapping reasons.

Entrepreneurs and start-ups appreciate that co-working spaces offer short-term leases, that the setting confers a veneer of legitimacy and that they can look to people from other companies for advice. But corporate workers have those benefits through their companies and, the case of getting advice, their colleagues. What displaced workers lack is community. “They could have worked from home,” Mr. Howell said. “But the reason they were self-collecting into the co-working spaces is because of the people.”

Defining what makes community can be elusive. In a corporation, people are linked by their department, project or boss (sometimes via a shared animosity). The random nature of co-working spaces allows for “self-selection,” which often colors the culture of a particular location.

For instance, the co-working location of Industrious in Prospect Heights, Brooklyn, has become a draw for young parents. (The company has more than 160 locations in over 65 cities internationally.) People bond over issues related to their children, said Jamie Hodari, co-founder of Industrious, as well as what he calls “nonwork commonalities,” like dog ownership or bowling.

Some co-working spaces are devoted to specific groups, including Hera Hub, a seven-location operation dedicated to female entrepreneurs, and Blackbird House, a Culver City, Calif., space dedicated to women of color, which is considering expansion into six other cities.

Blackbird House, the physical space of an organization called the Blackbird Collective, opened in 2019, has found a profitable niche hosting notable speakers like Kamala Harris, Stacey Abrams and Alfre Woodard. “It is no small thing to be amongst a collective of peers who understand the journey of being in rooms where no one looks like you,” Bridgid Coulter Cheadle, the company’s founder, said. Blackbird House suffered during the pandemic, she said, but achieved operational profitability upon reopening. “We are looking at how you scale this.”

What some like best about the co-working community is the ability to ignore it. Jonathon Newby, a lead product designer for the San Francisco-based Zendesk Labs, could easily work from home developing software that connects companies to their customers. He has his home to himself during the day, distracted only by a little street noise and his dog.

“I am bit of a homebody,” Mr. Newby said, “but too much of anything is too much.” And so he frequents an Industrious site in Indianapolis, although he says he doesn’t engage with other workers, doesn’t know anybody’s name there and definitely skips the pizza parties. Nevertheless, his creativity is stimulated by other workers buzzing around him. “It’s nice to be around that, even if I don’t know them,” he said. “It’s a vibe.”

That vibe, however, has not caught on with investors, said Nicholas Bloom, a professor of economics at Stanford University who studies remote workers. Investors aren’t necessarily looking at co-working spaces in terms of occupancy or popularity, but as generic real estate holdings in a glutted office market. The commercial downsizing that has driven employees to co-working spaces has also resulted in a surplus of office space with depreciating values.

Dr. Bloom’s research shows that between November 2021 and January 2022, about 45 percent of U.S. workers ages 24 to 64 worked remotely. Most worked from home, but a third were nearly evenly split between co-working spaces, public places like coffee shops and libraries, and friends’ homes.

Sometimes, though, the cost of remote work, which typically varies from $50 a day to $400 a month, doesn’t come from employee pockets. Zendesk, where Mr. Newby works, provides remote workers with a stipend for a home office or co-working space. “The business benefit is that we offer a great employee experience,” said Niamh McGarty, senior human resources director at Zendesk, “which has increased our ability to attract and retain diverse talent.”

And Zendesk is not alone is encouraging workers to embrace the co-working lifestyle. When Jennifer Barbush, a pension administrator for MetLife, was working from her home in Citrus Park, Fla., her two children, ages 2 and 5, habitually interrupted her day.

“They need attention,” she said. “My eight-hour day turned into a 12-, 13-hour day.”

When returning to the office became possible, she wasn’t enthusiastic about the 30- to 40-minute commute to a sterile suburban office park. She wondered if she should consider changing jobs. Instead, she was allowed to join a co-working space in Ybor City, closer to her home.

“Now instead of working in one big office in suburbia, where you have to have a car to go anywhere, I can take the little trolley over to Tampa,” she said. She is happily keeping her job.