Suburban Homes and Retail Are the Budding New Office Hotspot


Real-estate companies are transforming suburban residences and retail spaces into offices, betting that the pandemic will increase demand for workspaces in these neighborhoods.

With many Americans working at home and planning to continue even after the pandemic, some startups and landlords believe these employees will want a place to work beyond their living room. They are offering these workers a nearby alternative: furnished office space, bookable by the day or month and within walking distance from home.

One of those companies is Daybase, a New York-based startup founded by the former WeWork executives Joel Steinhaus and Doug Chambers. It is launching this week and plans to open its first locations in Northern New Jersey, this year, eyeing suburban towns like Hoboken and Montclair.

A proliferation of new suburban office spaces could help fill empty retail space. They could also further blur the distinction between residential and commercial neighborhoods and help remake metropolitan areas.

Today, most cities are built around central business districts designed for commuters. But some urban planners suggest cities could become more decentralized, with more and smaller offices throughout the suburbs. That would allow more people to work and shop without ever having to commute far.

Daybase said it is turning retail spaces into furnished offices that average around 5,000 square feet. Customers can use a common work lounge in return for a $50 monthly membership fee, and pay extra for private workspaces and meeting rooms. Mr. Chambers thinks the model will appeal to landlords because the offices can bring new customers to suburban retail who otherwise wouldn’t be there during the day. The company is backed by venture investors Company Ventures and Good Friends.

A rendering shows the planned Second Space offices, expected to open in late summer, located in a suburban apartment building in Monrovia, Calif.



Photo:

Two Tyres Design

Daybase doesn’t want to replace corporate headquarters but to create an additional network of smaller offices, said Mr. Steinhaus, who served as former WeWork Chief Executive

Adam Neumann’s

chief of staff and as the company’s head of strategic initiatives, among other roles. “There’s not going to be a switch that’s flipped and we’re all going to go back to some normal,” he said.

Big apartment landlords are also experimenting with furnished offices.

AvalonBay Communities Inc.,

which owns more than 85,000 rental apartments across the U.S., surveyed its tenants last summer and found that many wanted a place to work at home. Now, the company is launching private workspaces that residents can book by the month, an offering it calls Second Space.

“It would be kind of an add-on, just like you might pay extra for a parking space or storage space,” said Chief Investment Officer

Matt Birenbaum.

The first location, in the ground floor of a newly built apartment building in Monrovia, a half-hour drive east of Los Angeles, is scheduled to open in late summer.

Equity Residential,

another big apartment owner, has long had conference rooms in its apartment buildings, but is now looking to add more smaller, private rooms that tenants can use to work out of, said Chief Investment Officer

Alec Brackenridge.

The San Francisco-based startup Codi, meanwhile, is putting offices straight into homes. The company acts as an

Airbnb

for office space, allowing users to rent out spare rooms or garages to companies as workspace during the day. Codi has about 500 listings in a number of U.S. cities, said CEO Christelle Rohaut, who founded the company in 2018 while studying urban planning at the University of California, Berkeley.

Plexiglass dividers and floor decals might not be permanent, but the pandemic will bring lasting change to offices. Experts from the architecture and real-estate industries share how they are getting back to work and what offices will look like in the future. Photo: Cesare Salerno for The Wall Street Journal

Workspace-cloud company Coder, which is looking to sublease its Austin, Texas, headquarters and go all remote, plans to move six employees into a Codi space in suburban northwest Austin by June, said Krista Ratcliff, who is head of operations.

The move saves money—a Codi desk costs about $700 monthly per employee compared with around $1,200 at the old headquarters—but the bigger appeal is offering an escape without having to bear Austin’s notorious traffic. Ms. Ratcliff, who has two children and works in her bedroom, said she is looking forward to getting out of the house and to an office that’s just a 15-minute bike ride away.

“I’m never going to ever in my life commute the way that I used to downtown,” she said.

Write to Konrad Putzier at konrad.putzier@wsj.com

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