The coworking phenomenon has taken the world by storm, making its way into every city across the globe. Some experts even believe coworking spaces will replace traditional offices entirely, and that the days of the 9-to-5 work schedule will soon be behind us.
When we think of coworking spaces, we think flexibility, affordability, diversity, and networking. While multinational corporations have recently hopped on the bandwagon, it’s coworking providers that are leading the pack and shaping the industry. Today we get an insight into this burgeoning industry from Novel Coworking, the largest owner-operator of coworking spaces in the U.S. Founded in 2013 in Chicago, the company has grown to operate 27 locations across 20 cities in the U.S. Novel Coworking caters primarily to entrepreneurs and small businesses in need of flexible office space, and recently announced the opening of its fifth Chicago location.
We recently sat down with Kayley DiCicco, National Corporate Accounts Manager at Novel Coworking, to get an insight into the company’s success and the future of the coworking industry.
Q: Can you tell us a bit about Novel Coworking’s history and evolution?
A: When Bill Bennett started his first business in 2007, he began to search for a bright, vibrant office space. With a growing company, he was eager to be located in Chicago’s Loop, but brokers turned him down when they learned he wasn’t interested in a long-term lease.
After looking at a few dingy sublets and several “very 1980s-feeling” Regus centers, Bennett settled for an affordable but basic coworking space at The Incubator in Evanston. He soon realized that without a sense of community and common space to interact with other businesses, he was spending 10 hours a day in his office without speaking to anyone.
Meeting other entrepreneurs who felt similarly dissatisfied with the available options, Bennett decided to use his expertise in niche real estate–his first business focused on student housing–to found Novel Coworking and create budget-friendly, amenity-rich office space to help small businesses thrive.
An exhaustive three-year search and $8 million in capital led him to 73 W. Monroe, which had everything he was looking for in a building: a central location, a good price, and historic elements that could be revitalized and incorporated into a contemporary office space.
Unlike other national workspace providers, Bennett decided early on that he wanted to own each Novel Coworking building in order to invest in the infrastructure in a bigger way and to create more amenities for clients. Features of Monroe’s five-floor building include original wood beams and Edison lightbulbs, a mix with contemporary amenities such as glassed-in offices, and dedicated 250 Mbps internet.
The Monroe building opened in September 2013, followed by two more locations in Chicago’s Loop in 2014, and locations nationwide in cities such as Seattle, San Diego, Denver, and Charlotte. Bennett expects to open 50 Novel Coworking locations in cities nationwide by 2020. Novel Coworking caters to a diverse set of companies in various industries ranging from freelancers to Fortune 500.
Q: How has the Chicago coworking scene evolved since Novel was founded?
A: When we first led the pack of coworking back in 2013 within the Chicago market, the competition wasn’t as fierce. There are now over 127 coworking locations around the city. This signifies a healthy market demand for this product and service as well as a bullish economy. There is a continual flow of remote workers and new startups are choosing to establish their company in the Midwest’s main hub: Chicago. Due to reduced labor costs and a more affordable housing market, investors and enterprise companies are eyeing Chicago over the coastal hubs in many cases nowadays.
Q: There are so many coworking spaces and providers today, catering to different audiences and needs. What does it take to stand out from the competition and be successful in this industry?
A: Flexibility and agility drive today’s workplace. Coworking companies are continually evolving their adaptability by integrating new technologies and putting forth various types of offerings that cater to the industry’s worker demographic. While most of our clients sign one-year leases, we offer everything from daily to monthly to half-year agreements so that their business has the flexibility to grow at its own pace. As many of our clients experience success and add to their staff, we also offer larger office suites at competitive prices that can accommodate up to 100-person teams.
Q: What makes Novel Coworking stand out from other coworking providers? How does it fare compared to juggernauts like WeWork or Regus?
A: Being an owner and operator of our buildings across the country allows us to position ourselves as a low-cost provider amongst our competition. We can adapt quickly to a changing market and demand from our clientele with a more customized product solution, from gigabit internet to multi-office suites for fast-scaling companies to grow into. Unlike other shared office spaces, we install our clients’ logos in color on their office doors as well as allow them to advertise their business in the lobby. We believe in entrepreneurs and small business because that’s who we are!
Q: Where do you think the coworking industry in the U.S. is heading? Are there any major trends you think will shape its evolution in the future?
A: I see the future of work as bifurcated: fundamentally, it will be unchanged – companies seek to fulfill customer needs and employees seek jobs that are challenging and rewarding. The methods of work and types of jobs are likely to be dramatically different than what exists today.
Increasingly, corporations are turning to coworking to accommodate remote employees, attract talent, promote work satisfaction and reduce leasing costs. Over the past year, we have positioned our offerings to further align with larger companies who are looking for the benefits of locating in shared office environments. They experience access to flexible term lengths, brand awareness, and a talent pool of innovators. Large companies trying to enter new markets usually start with relatively small and agile teams. We have spaces they can grow their teams up to 100+ with plug & play capabilities while maintaining reduced real estate costs. Commercial brokers have been an integral resource to fuel this sector of growth for us.
Q: Do you think traditional office spaces will become obsolete? Will we all be working from a coworking hub in the future?
A: Landlords and developers are at the point where they understand coworking is around to stay and they are trying to work out the best way to stay relevant. Some will attempt to create their own one-off coworking-type environment, which provides an additional amenity to the building, but rarely do they have the know-how to run a coworking space efficiently due to the nuances of cultivating a thriving community with access to a national network, integrating technology at a scalable level, and training staff to run the operations effectively.