Coworking space and incubator network 1776 has officially closed up shop at its Rittenhouse location on the 12th floor of 1608 Walnut St., the Sun Oil Building, a company spokesperson confirmed this week.
The company maintains Philly locations in Brewerytown, at Pennovation and in nearby Cherry Hill, as well as in Indianapolis and Lafayette Square in Washington, D.C.
Melissa Rucci, 1776’s director of strategy, told Technical.ly that pre-pandemic, the Rittenhouse location — previously the company’s flagship location — fit the company’s model. But when workspaces had to close for several months in 2020, and the desire to work downtown faltered, the company reached an agreement with its landlord terminate the lease early, in January 2021.
FORT Robotics CEO Samuel Reeves told Technical.ly that the startup will be taking over the space as it grows from 30 to 75 employees this year.
Many of the coworking space’s members transferred to the Brewerytown location, 1776’s Rucci said in an email. The move is in line with the company’s business model shift away from leased locations to managed locations, and Rittenhouse was the last of the leased locations.
In 2017, 1776, then the name of a D.C.-based incubator network, merged with Philly-based Benjamin’s Desk. The combined companies took the 1776 name, and in the last few years have opened multiple spaces, including Philly’s Brewerytown location, the Cherry Hill Mall location and Maryland’s North Bethesda location.
The merger in 2017 also came with a new business model. 1776 said it was moving away from signing leases and focusing on partnering with asset owners in a management capacity — essentially, deals in which someone else owns a space, and 1776 would staff it and create programming. In the last few years, it’s closed its Crystal City location in D.C. and at Washington Square in Philadelphia.
The Rittenhouse location became a topic of conversation in early 2020, when tenants were momentarily kicked out of the campus. That day, CEO Jennifer Maher told Technical.ly that she and her team were aware of what had happened, and that it was “the result of a large miscommunication between the company and the building’s management.”
Technical.ly discovered through court documents in March of last year that there were a series of lawsuits filed by building managers claiming unpaid rent by 1776, ranging in amounts up to about $165,000. On Feb. 26, 2020 — the day tenants were temporarily removed from the space — court filings show eviction documents were served.
“As you know, over the last two years, we have been switching from a leased arbitrage model to a managed services model,” Maher said through a spokesperson at the time. “We have been in good faith negotiations with the landlords at 1776 Rittenhouse during this time and resolved all outstanding issues. We look forward to continued growth at the 1776 Rittenhouse campus.”
The closure comes amid a time coworking spaces have had to figure out how to operate with social distancing guidelines due to the pandemic, or move their communities totally online. The future success of coworking spaces likely depends on what kind of “return” companies are looking for.
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