Be it for startups or federal employees, here’s how WeWork is retooling coworking options in DC

It’s been two years of change at coworking provider WeWork.

There were the series of setbacks in autumn of 2019 — founder Adam Neumann stepping down as CEO, a layoff of 2,400 employees, and its IPO put on indefinite hold, to name a few. By February 2020, the company had brought on new CEO Sandeep Mathrani and slowed down the build out plans. The next month, the pandemic arrived. The company kept spaces open, but made changes to account for health and safety.

But two years later, one thing remains true. The most recognizable national name in coworking still has a sizable DC presence — 13 spaces in the DMV and one on the way, to be exact —and is continuing to make moves with its DMV offerings.

Earlier this year, it partnered with DC government — in a partnership known as WeWork x DC — which offered discounts on office space and desks in 11 area locations as well as workspace options for Georgetown University students.

Since then, the company has seen overall growth in usage of its spaces, with members embracing its more flexible options.

D.C.-area Director Suzie Russell told Technical.ly in July that its members are split with 36% spending time at office headquarters, 30% at home and 34% at a flexible, satellite or shared office space. It also saw a 30% increase in usage of its new hourly booking service WeWork On Demand between April and May, and many were spending time at downtown locations in the middle of the week and its Virginia and Maryland spots on Mondays and Fridays.

Going into the fall, Errol Williams, WeWork’s VP for the Atlantic region, told Technical.ly that those trends are continuing, with continued growth expeceted even with Delta strain concerns. Currently, he noted that small businesses and startups are going with private office options, while others are doing a combination of a private office with some of WeWork’s more flexible options (like hourly use and multiple locations) and others still are using the company’s flexibility to support a wfh model for employees.

“We’re seeing increases in occupancy and increases in people returning to the office,” Williams said. “We’re seeing them do that in lots of different ways, some that didn’t even exist before the pandemic.”

September is already off to a good start, Williams said, with occupancy growth 10% month-over-month from August. The week after Labor Day, he added, also saw a 20% increase in key card swipes and people coming into the office, particularly in some of the metro area locations. At the moment, he said that the 1701 Rhode Island Ave NW in Dupont Circle, 1775 Tysons Blvd in Tysons and 1201 Wilson Blvd in Arlington are the most popular locations, meaning workers are embracing the metro area for their workplace home base.

WeWork’s K Street space in DC (Courtesy photo)

“One of the appeals of the new hybrid model is the ability to, at times, work closer to home,” Williams said. “And our DMV portfolio is set up in a way that actually is really conducive to companies being able to do that.”

In August, the flex work company was also one of five who landed a one-year contract with the U.S. government’s General Services Administration to provide coworking and hybrid work options to federal government employees (EXPANSIVE, The Yard, Deskpass and LiquidSpace also nabbed the gig). The contract has a maximum value of $50 million worth of space and desks over five years, if it’s renewed, and will be available to government employees nationwide.

Although Williams said the new contract with the GSA does not mean WeWork will be changing its DC model to court more government employees, he said that the federal government contract is a huge indication of the power of flexible work. And if it goes well, it could mean more government employees embracing coworking as an option in the coming years.

“[The contract] is also a confirmation of this hybrid model and flexibility period because we see now the federal government embracing the idea of flexible working,” Williams said. “And the idea of flexibility in work is is a huge validation for lots of others who are thinking about their future real estate model.”

Going forward, Williams said that WeWork will continue evaluating the need for additional spaces in the DMV. Although it doesn’t have any new builds to share at this time, it’s on track to complete its Wilson coworking location on Wisconsin Avenue in Bethesda in March of 2022.

But this booming DC market does not necessarily extend to nearby Baltimore. WeWork first announced a Baltimore location at Wills Wharf back in 2018 but ended up pulling the plug on plans last July. Williams said there are no current discussions to open a WeWork space in the city, even with the new federal government agreements. But he would put it under the umbrella of “always evaluating” for new potential.

The Wilson spot, first announced in 2019 with plans to be complete in 2020, was delayed until the above date, but WeWork chose to go forward with the Bethesda location, potential proof of the DMV market’s strength.