Pittsburgh coworking spaces are refreshing their models to survive

Coworking has surged in popularity over the last two decades, but with the rise of hybrid work models and return-to-office mandates, its future is uncertain. 

In Pittsburgh, tech worker hubs crop up in disparate neighborhoods, setting up a need for more community where coworking can step in. As grand openings and major closures of these spaces coincide in the region, coworking founders in the area say that shift could be the difference between staying in business and having to close up shop. 

“We, community organizers, cannot maintain spaces within a purely transactional relationship,” Colin Dean, managing director of Code & Supply, a group for software professionals that previously ran a coworking space, told Technical.ly.

Pittsburgh has strong comeback potential, and a storied history, to make that happen. The city was recently ranked No. 9 in the US for coworking density, offering residents 0.8 coworking spaces per square mile, according to a study from CoworkingCafe.

The popularity of coworking in Pittsburgh started growing in the late 2010s, according to Dale McNutt, owner of 5thAVE Studio, a coworking space in Pittsburgh’s Uptown. 

In 5thAVE Studio’s early days, the space was primarily occupied by startups aimed at spurring community redevelopment in the area. Its residents have included Pittsburgh’s first makerspace, HackPGH, standout startups like NoWait – which developed a restaurant waitlist app that was acquired by Yelp for $40 million in 2017 – nonprofits such as the newsroom PublicSource, as well as fashion brands, interior design firms, artists and even a hair salon.

Today, nearly 90 companies have passed through the 13,000-square-foot space, and across industries, there’s a common thread. Coworking residents like to be surrounded by art, books and creative material, while also having control over a space they individually own, according to McNutt.

“There was a vision that a lot of coworking spaces had that you would come into a space and just sit at a table,” McNutt said. “I don’t think people want that anymore. I think they want to feel like they have more of a space of their own.”

Yet, coworking spaces still shutter when they can’t find the financial support to back that up. 

Its finances, not a lack of interest, driving coworking spaces away

While Code & Supply’s coworking space, C&S Workspace on Friendship Avenue, bounced back after Covid, a wave of tech layoffs starting in 2022 caused its trajectory to change course. Late last year, Dean announced it would be closed by the end of 2024.

“Our members were impacted hard,” Dean said. “We dropped to around 50% capacity by May 2023 and never bounced back, despite more active marketing to our base and incentives for past members to return.” 

From Dean’s perspective, the C&S coworking space was susceptible to macroeconomic trends, like the rise of inflation and interest rates, that caused employment contraction. Microeconomic factors, like people needing coworking space less because of underemployment or investing in home offices, hurt the business.

However, the community kept C&S going through it all, as 40% of the members kept paying even when the space was closed during the pandemic, according to Dean. The return on that investment was “not money but community,” he said. 

“Humans need a third space,” Dean said. “Coworking spaces, like the guild halls that preceded them, can fill that need when limited funds are available becomes an exercise in continuous novelty and marketing, both of which are real work.”

With those lessons in mind, other coworking developers are trying to find a way forward, hoping for opportunities in not just selling a workspace, but in offering a service that fosters social connections and encourages networking, collaboration and even the potential for new friendships. 

Founders hope community input can revive the spaces

A community-first approach is exactly what three aspiring coworking space founders aim to implement as they look to open a new location in the South Hills. 

Chris Roberts, Karlyn Gold and Matt Nicosia all connected over their desire to be around and work near like-minded people. All residents of Pittsburgh’s southern suburbs, the team said there aren’t great options for coworking in the area and driving into the city is often a necessity to find a decent place. 

While there are corporate-owned coworking spaces nearby, Roberts said he and his cofounder were looking for a place with “some life to it.” 

“You go into any of those spaces and most people don’t know each other,” Roberts said. “There’s very little interaction and very little thought put into facilitating interaction in those environments.” 

Despite possible headwinds with entering into this industry, the team plans to apply a community-based approach to the process of opening a space, taking inspiration from Philadelphia’s Indy Hall. 

“They started with community first,” Roberts said. “So, let’s focus on building a group of people who are interested in the same things, and then we can work together to make this thing happen.” 

One of the benefits of a community-first model is it offers lots of opportunities for input, on everything from workspace design to the business’s financial structure. In that vein, the South Hills coworking team held a community engagement event in January to gather local resident input on a possible coworking space on Carnegie’s historic Main Street. 

The group discussed what makes a coworking space great, what coworking spaces are getting wrong and potential building features and amenities the future space could have. 

Just like the ethos behind long-running spaces like C&S and 5thAVE Studio, the event participants generally agreed a coworking space isn’t just a place to get work done, it’s a place to connect.

“We want to be around people, but we want to find ways where it isn’t forced,” Mike McGreevy, an attendee and independent consultant, said. “The DNA of this business is community and not just being an office space. Now, more than ever with the freedom to not be in the office everyday, we need something to fill that gap.” 

Still, the South Hills founders face the same challenge presented to past coworking spaces: the financials. They’re conducting market and qualitative research by interviewing around 40 people to find out what to charge. 

The recent event jumpstarted that, aiming to get community feedback on possible strategies with the hope that engaging the community is ultimately what gives it more longevity. 

“Coworking can die,” Mark Heckmann, an attendee at the event, said, “even when you do everything right.”