Cost of membership at New York’s co-working spaces varies. Space is available daily for free on a first-come-first-served basis at Wix and costs approximately $600 per month at WeWork (WE). Pricing, though, is rarely an issue, and choice comes down primarily to the type of startup an individual is operating.
“Based on what I’ve seen, the costs are all comparable,” said Ashkán Zandieh, director at ABS Partners. “It’s never a driving force when it comes to co-working. It’s who you want to work with and who you want to sit next to.”
Though Shindig will receive $15,000 as part of the ENY program and is gearing up for a round of seed funding, the startup intends to return to Alley NYC once its six-week stint upstate is finished.
“We feel like we owe it to them to stick around, and why not?” Mr. Raymond said. “It’s such a great community.”
Community is a word you hear a lot in the co-working scene. In fact, it’s what most differentiates co-working from traditional office providers, according to industry analysts.
“The difference between co-working and the Regus and other executive office suites of the world is culture,” Mr. Zandieh said. “Look at WeWork on Varick Street. It is laid out just like office suites, but what they are selling you is culture, a collaborative culture.”
While WeWork Labs, a WeWork affiliate, caters primarily to tech startups and includes a more selective application process and subsidized fees, New Work City is geared more toward freelancers. WeWork’s traditional model, which separates different industries by floor, has also begun to cater to industries by location, with fashion, for example, more naturally drawn to offices in Chelsea and the West Village.
As the co-working model continues to grow in New York, so will availability of space, both in size and location. Alley NYC, less than a year old, is already negotiating to take the rest of the 17th floor of 500 Seventh Avenue, another 10,000 square feet of space. WeWork will soon move its headquarters from 175 Varick Street, where it once occupied just one floor, to 120,000 square feet at 222 Broadway.
Scalability is the key.
“I view [co-working] similarly to startups,” Mr. Zandieh said. “They think about scalability all the time, growth all the time.”
“WeWork started at 175 Varick with one floor, then took two floors. Rather than venturing off into Hudson Square, they scale within their own building,” he added.
Though some of the city’s landlords have been quick to capitalize on the increasing number of co-working spaces in New York, the largest have eschewed welcoming them to their buildings for fear of increasing competition for their own branded spaces.
“A lot of landlords are going into the business for themselves,” said Mr. Cohen. “They’re generally opposed to allowing third-party co-working in their portfolio.”
One example is SL Green, which has started Emerge212, a boutique office space provider with locations at 3 Columbus Circle, 125 Park Avenue and 28 West 44th Street.
Additionally, there are fears among some in the real estate community that the rapidly growing co-working bubble is set for inevitable collapse.
“If there’s a shakeout, who will the winners and losers be?” Mr. Cohen asked. “There’s no good answer; it’s anybody’s guess.”
