The lines between retail, office, and industrial real estate are becoming exponentially blurred. Retail brands are using stores for fulfillment centers, offices are displaying retail products, and retail stores are becoming coworking habitats. Traditionally, the lines between each were indisputable as both landlords and governments set expectations on the use-cases of real estate. However, the world is developing omnichannel experiences. And those experiences require omnichannel real estate.
The evolving relationship between retail and coworking seems to be at the forefront of the change, with coworking companies leasing retail real estate and showcasing retail products in their spaces.
Brands are using coworking spaces to showcase products in real life.
Last year, WeWork announced a partnership with Feather, a furniture rental company. It allows WeWork members in more than 35 US markets to design office spaces with Feather’s furniture. The partnership is a flexible and seamless benefit to WeWork customers while simultaneously acting as a billboard for the Feather brand. The furniture retailer would otherwise have had to achieve this marketing by opening more than 35 retail stores. Instead, by partnering with coworking companies, e-commerce brands can enter the physical world while avoiding the cost and commitment of a store.
Similarly, Nguyen Coffee Supply, America’s first specialty Vietnamese coffee importer and roaster, is partnering with The Wing, a women-focused coworking space. “As a company that’s committed to building a more inclusive and equitable coffee industry, we’re thrilled to be launching our first national retail partnership with The Wing. More than anything, finding values-aligned and mission-centered partnerships helps us scale our impact together,” stated the company’s Founder, Sahra Nguyen. The partnership will go beyond offering Nguyen coffee in the space to include branded pop-ups and an event hosted by The Wing’s CEO, Jen Cho, and Sahra Nguyen. The event will discuss and celebrate Asian Americans and Pacific Islanders (AAPI) founders during May, AAPI Heritage Month.
The Wing recently re-opened spaces with a fresh design under new parent company IWG, a flexible office space firm founded by English billionaire Mark Dixon. After the challenges of previous leadership and the pandemic, the company is focusing on building an inclusive culture and revitalizing the brand. “The Wing is more than a coworking space–it’s a platform for members to celebrate, collaborate and learn from one another. I believe this is why we offer a unique opportunity for brands like Nguyen Coffee Supply to get in front of potential customers and build intimate, authentic connections,” shared Jen Cho, CEO of The Wing.
With coworking spaces available to e-commerce brands, a physical store is less necessary than before. In addition, there are many retail real estate spaces with optimal foot traffic and locations available for coworking companies to utilize.
Coworking companies are leasing retail real estate spaces.
Before the pandemic, coworking spaces were already popping up in retail spaces, usually in malls whose demand faltered. However, over the past couple of years, the desire from coworking companies to lease retail real estate has risen.
The Hudson’s Bay Company (HBC) recently announced that it partnered with private equity firm, Ares Management
Industrious is another coworking company moving into the suburbs through retail. It has ramped up its focus on malls over the past couple of years. The program’s first location opened in Phoenix in 2018 at Scottsdale Fashion Square and was the company’s best-performing location in the launch year. It now has many more mall-based sites and recently announced plans to open in Legacy Place shopping mall in the Boston suburb of Dedham. “Our best-performing locations are within mix-use developments, like retail centers. Much of this is driven by the fact that people want to go to workplaces that are conveniently located and easy to access. This means spaces that are nearer to home and that don’t require anyone to get into an elevator to go 10+ floors up, but that rather they can go in and out of in a matter of seconds. We are increasingly adding Industrious locations in these types of developments because that’s where people want to work from, and we want to support people as they work wherever works best for them,” said Jamie Hodari, Cofounder and CEO of Industrious.
Coworking and retail are crossing paths in more and more ways as the world embraces omnichannel shopping and hybrid work. There’s no doubt more brands will take advantage of coworking partnerships, and coworking companies will take advantage of retail spaces. The benefit greatly outweighs the cost. It’s simply a matter of all parties becoming more flexible with their business models.