At malls across the world, major coworking companies like WeWork are moving into department stores such as Saks Fifth Avenue and Lord and Taylor stores.
This is not a new trend. In fact, the mass closure of under-performing retail stores has been a trend for a while. The “retail apocalypse” has been happening long before the pandemic, and coworking companies are now seeing the opportunity in expanding into the premises to turn a profit.
In India, for example, Hudson’s Bay Company has partnered with WeWork to create coworking spaces called “SaksWorks.” The locations will allow freelancers, startups, and remote workers access to amenities like gyms, cafes, and restaurants all while working remotely.
In the U.S., this trend is also picking up speed. In Ohio, coworking operators like COhatch are expanding into malls. For example, a new location will be coming into Beachwood Mall — a popular shopping area amongst Cleveland locals — in November.
Though e-commerce has definitely disrupted the role that brick-and-mortar stores play in customers’ lives, it’s positive to see the flexible office industry doing its part to keep them alive and to expand on the trend of franchising.
In a study about the future of retail by JLL, coworking space in malls, street-front locations, and other retail properties will grow at an annual rate of 25% through 2023, reaching around 3.4 million square feet. (Note: This 3.4 million square feet is a small fraction of the 60 million square feet of coworking space currently available in conventional offices across the U.S.)
Moreover, leading coworking players like Regus are also expanding into the retail and hospitality space by expanding into both shopping malls and hotels. This is because coworking spaces are the ideal place for remote workers looking for alternatives to working from home.
“I wish we had made a bigger bet on malls earlier,” Industrious CEO Jamie Hodari told Modern Retail.
As more and more workers want to be rid of commutes and be closer to their homes in suburban locations, it will be interesting to see how many other private coworking locations are able to compete with WeWork, IWG, and Industrious to formulate spaces.
