CEOs See Opportunities to Incorporate WeWork
By Les Shaver
This is the third article in Chief Executive Outlook, our series predicting industry trends in 2018.
While the apartment industry’s leaders think leasable office space has a strong future, they are skeptical about the WeLive trend.
WeWork is a company that provides shared workspace, community and services for entrepreneurs, freelancers, startups, small businesses and large enterprises. The apartment industry is taking notice.
“The WeWork model is something that has a real future,” says MAA CEO Eric Bolton. “There is demand for it and a need for it. It is up to the apartment industry to adopt that model and philosophy and bring it into our communities.”
With working space as a popular amenity for work-from-home Millennial residents, apartment owners see the potential to carve their own WeWork space on a smaller scale.
“We are trying to create a WeWork environment by offering business centers and more elaborate work areas that feature strong WiFi connectivity and that provide coffee and refreshments for the residents,” Bolton says. “These venues have work stations that are portioned off to create that type of environment.”
AMLI Residential is incorporating four or five single office spaces in some of its communities. The company leases them to residents who need office space for workspace or meetings. Chairman and CEO Greg Mutz says these spaces have appeal in communities with approximately 300 apartments or more.
“[Nonetheless], we don’t want to get into the office space business,” he says. “It is an amenity. It is not a big money driver and there is expense keeping the space cleaned and rented.”
Ken Valach, CEO of Trammell Crow Residential (TCR), has spoken with companies that are building mixed apartment-office sharing communities in Houston.
“It is like a WeWork where residents get priority to use the space, but non-residents also may access it,” he says.
In some cases, WeWork is pairing its office space with WeLive, co-living buildings. With shared amenities such as a chef’s kitchen, laundry room, arcade and yoga studio, these developments have been described as dorms for adults.
Bolton is skeptical of the WeLive model.
“The WeLive model has a tougher future,” Bolton says. “At the end of the day, people would prefer more privacy than not. The only way the WeLive model takes is if you can create opportunities in expensive housing markets where you can offer a location that combines shared living space and offer it at a price that is much less than what they would otherwise have to pay to be in that area.”
Gables Residential CEO Sue Ansel and Valach agree that WeLive can work best in pricey New York and San Francisco metros.