An unexpected result of the pandemic has been that it has brought people together by rekindling their sense of community. Today, people buy locally to support small businesses, they spend more time with family and friends, and they travel much less than three years ago because they work remotely or in a model hybrid. This change has accelerated the demand for flexible office space, as a growing number of companies have adapted their work policies to provide more flexibility to their employees.
Flexible office space provider FLOURISH | Coworking has built a business model that allows users of shared office space to support businesses in the neighborhoods where they live, and also help local charities. The company is building significant portfolios across the United States, adding multiple locations in secondary markets.
“The focus of our value proposition is community and philanthropy. People want to be part of their community and they want to have a higher purpose. We favor this environment,” said Chris Smith, Chief Risk Officer of THRIVE. commercial real estate director.
In the interview below, Smith outlines the company’s philosophy and explains why coworking is here to stay.
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How would you describe the post-pandemic coworking scene?
Black-smith: Busy! We’ve had a very positive response to our model, whether it’s independent contractors, business owners, corporate employees – who are looking for a place to work with team members, less a long drive – and city leaders who want to create a vibrant downtown with the energy and commerce our members bring. Our coworking model also includes extracurricular adventures such as hikes and paintball competitions, as well as philanthropy around our 501(c)(3) THRIVE | Initiative, which helps make work more meaningful and useful, and people love it.
What changes and challenges have you noticed in the coworking space over the past two years?
Black-smith: The pandemic was definitely a challenge for the industry and something we all had to deal with… COVID-19 and the Great Resignation were a lesson for businesses around the world. Do we really need to have staff in the office 24/5 in a large building with drop ceilings and fluorescent lights and cubicles where employees have to drive for hours a day to and from come ? I think the answer to this question is no. Change was needed, and coworking’s flexible, mixed-use model — keeping people in their neighborhoods, shopping local, and focusing on the community — is the antidote for employees, entrepreneurs, and businesses.
Can you develop your strategy to increase your flexible office portfolio? What type of spaces are you looking for?
Black-smith: Walkable city markets like the ones you see on our list. We found that with the onset of the Great Resignation, the first-tier market suburban markets are in vogue. We also enjoy Tier 2 markets like Birmingham, Ala., Asheville, NC, and Charleston, SC, which are perfect for our members’ networking opportunities.
We typically like a 10,000-25,000 square foot space that is central to a downtown market. We’re also looking for markets where city leaders are focused on growth and want to bring in someone like us who can keep people in their communities. This way they can help boost local economies and help fund charities in their area through the THRIVE | Initiative.
Which US markets are you targeting to grow your coworking footprint?
Black-smith: Our corporate clients and our M&A work help us define where there is demand. Our enterprise solution allows businesses to create a hybrid work model to provide flexible space where their employees live. We spoke to leaders who now realize they can offer a hybrid model where their employees can work locally, even if it means having an anchor location in 10 THRIVE workspaces in a metro market.
Atlanta is a good example. We have a number of large suburban markets that make up the Atlanta metro area, such as Alpharetta, Milton and Canton in operation and Gainesville, Snellville, Suwanee, Duluth and Roswell in development. If you’re an employer of 2,000 people in a city like Atlanta, they drive from a lot of places, and those suburban markets are where their employees live. We will work with corporate employers to build and organize a THRIVE cluster model to give them a foothold in our buildings, in the neighborhoods where their employees live. These employees will get the best of both worlds. They will have a base for their work, philanthropy to add purpose, and the ability to become more involved in their community.
You have several flexible offices that you plan to open in the next 12 months. Where are they located and how big are they?
Black-smith: Our Duluth, Ga. site is going to be approximately 23,000 square feet, but other sites under development include: Asheville, NC (12,000 square feet); Gainesville, Ga. (15,000 square feet); Suwanee, Ga. (13,000 square feet); Cumming, Ga. (10,000 square feet); Roswell, Ga. (10,000 square feet); Greenville, SC (22,000 square feet); Birmingham, Alabama (13,000 square feet); Chapel Hill, North Carolina (11,000 square feet); Bozeman, Mont. (10,000 square feet); Snellville, G. (14,000 square feet) and Winston-Salem, NC (15,000 square feet).
We have already opened branches in Alpharetta, Milton and Canton, Ga., Charleston, SC, Holly Springs, NC and Columbus, Ohio.
It’s the Wild West right now, as our partner 33 Degrees has pledged to support our launch in 500 locations. Currently our sweet spot is 25,000-50,000 square feet, but that is our initial goal. Things may change as the market matures.
Who are your target tenants and what does your business model focus on to meet their needs?
Black-smith: We like the small business owner with eight to 12 employees, the solopreneur, the satellite company employee, or the corporate client who wants a decentralized hybrid working model for their nationwide or global business.
Enterprise clients with thousands of employees need to create a true hybrid model that keeps their employees close to home. Instead of sending thousands of their employees to a single building, they can anchor a location, based on the radius of residence of these people. And to add purpose, companies can support our philanthropic initiative, where employees can donate spare change to a local charity partner and, in return, earn discounts at participating neighborhood retailers. This model offers flexible use where their employees live and allows them to actively partner with a charity.
For entrepreneurs and solopreneurs, we offer a turnkey solution so they can grow up or down without a contract, along with all the culture and purpose they need. We provide the location, the community, the experiences and the heart necessary for a successful business.
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Please give us some details about the amenities included in your flexible offices.
Black-smith: Beyond edgy decor and daily snacks and beverages, we offer chef-prepared breakfasts, lunches and happy hours each month, as well as our weekly Beer Fridge Friday. There are also community service events, as well as quarterly extracurricular adventures – hang-gliding rides – designed to build camaraderie among members.
What are some of your predictions for the future of the coworking industry?
Black-smith: Coworking is here to stay. I believe business leaders have realized that allowing people to work both from home and in an office located at the discretion of the employee is here to stay if KPIs are managed. The focus on growth will continue to move away from central business districts and more towards where people live and want to be with amenities. I also expect consolidation to take place.