WeWork is now second-biggest private office tenant in Manhattan

June 19, 2018

Eight years after opening its first co-working space in New York City’s SoHo neighborhood, WeWork is now the second-biggest private office tenant in Manhattan, Recode reports. The company—which provides in-demand shared workspaces and services for freelancers, startups, and small businesses—now has 50 locations in the Big Apple; and five locations in SoHo, alone.

In fourth place just last year, WeWork is second only at this point to financial services company JPMorgan Chase, according to data from the real estate firm Cushman & Wakefield. Indeed, if WeWork were to lease another 407,356 square feet—roughly eight more average-size locations — it would be the biggest private office tenant in Manhattan, Recode reckons.

In 2017, WeWork opened ten new locations in the city and already another five are anticipated to open this year. Thanks in part to a $4.4 billion infusion from SoftBank’s Vision Fund in August 2017, the company expects 2018 to be its biggest growth year yet, according to the Recode report—estimating an addition of more than 750,000 square feet of office space in New York City.

WeWork currently has 2.9 million square feet of open office space across Manhattan, Brooklyn and Queens, half of which was opened in the past two years. That’s enough to house the current 45,000 members.

Each location has a standard set of amenities and perks—beer and microbrew coffee on tap and large, open common spaces — but not all New York WeWorks are created equal. The South Williamsburg location, popular with freelance artists, has a photo studio members can use for shoots, and the Hudson Square location is building an indoor garden. A number of New York City locations also now include workout equipment.

WeWork says its New York City locations are, on average, 90% occupied. Several—including those in the Meatpacking District, Chelsea and Bryant Park—are at 100% membership and have wait lists, suggesting there’s still demand to grow its NYC capacity even more.

According to Recode, companies with more than 1,000 employees are WeWork’s fastest-growing segment, often renting overflow or satellite spaces from WeWork. These enterprise clients now make up about 15% of WeWork’s New York City membership, up from virtually zero a few years ago.

New York, which comprises 20% of WeWork’s 13 million square foot global footprint, also has become a test area for WeWork’s other businesses. These include a “co-living space” called WeLive that rents around 200 fully furnished apartments, which feels like a fancy dorm for grown-ups, with Pac-Man machines in the laundry room and a shared rooftop hot tub; and a gym called RisebyWe that’s a subterranean oasis, complete with a mineral bath, “semi-private” training, and an Astroturf gym.

Research contact: Rani.Molla@Recode.net

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