Sometime in the near future, a gig economy or remote worker who lives in an apartment building in Austin, Texas might start their day like this: They will leave their apartment and walk downstairs to a coffee shop where they will grab an iced latte. Instead of having to leave the building to travel to a coworking space, they will simply walk past the coffee bar to their desk at a coworking space — within their own building. That’s not some pipe dream thought up by a hopeful worker: It’s soon to be reality with a new coworking space in an apartment building in the city’s domain development.
That’s exactly what spaces such as Texas’ Craftwork Coffee seeks to accomplish as coworking spaces become mainstream — and a popular workplace of choice for many workers. In fact, the number of members in coworking spaces is projected to grow to 3.1 million people in 2019 and 5.1 million people by 2022. Overall, Gcuc estimates there will be a little more than 17,700 co-working spaces around the globe in 2018. But these places aren’t just found in office buildings or converted store fronts. These destinations for productivity and connection are coming to apartment buildings — in cities such as Austin — too.
These additions to apartment complexes come with benefits for building owners. For one, common spaces aren’t always used to their full potential.
“They’re underutilized or they’re vacant altogether,” Craftwork President Trevor Hightower told PYMNTS.com in an interview. Furthermore, apartment owners can generate income in what could otherwise be a non-incoming producing space.
“The operation itself leads to higher-asset level goals,” Hightower added. And the spaces, too, can be a marketing tool as the coworking spaces bring in members who are introduced to the apartments. The idea is that someone who joins the coworking space might be inspired to become a tenant someday.
For current residents, the space can serve as an amenity — and can overcome a challenge that residents can have in obtaining their morning caffeine fix. Apartment complexes might, for example, have a fancy coffee machine, but those machines can break or run out of supplies, leaving tenants scrambling for a cup of joe. Yet, that potentially frustrating experience can be replaced with something altogether through coworking spaces that have coffee shops: A barista, who knows a tenant’s particular tastes, can make coffee for them. In some cases, too, apartment buildings can offer residents discounted coffee. Based on his experience, Hightower finds that residents are happy to pay for the coffee instead of a free product because people value the experience, particularly if it’s a good one.
The Target Market
Coworking spaces — like the kind that Hightower seeks to bring into apartment buildings — serve two ends of the same barbell. On one end are those you might think of as the target market for coworking spaces — gig economy workers. That is a significant population, according to the PYMNTS Gig Economy Index: Gig workers are projected to account for more than $1.4 trillion of the total U.S. income in 2018, the report found. Those workers generated the demand “that led to so much success with WeWork [and others],” Hightower said.
And, of course, there’s the solopreneur.
“That person, who is living at or nearby one of our locations, is a great customer for us,” Hightower said. For these workers, they can pay for their coworking space with automated clearing house (ACH) transfer or credit card. And for the coffee? Square.
At the other end of the barbell, Hightower is seeing the remote worker on the enterprise side. This employee might be working from home or Starbucks. And this situation isn’t leading to satisfaction or employee health, he said, but these employees could make the migration to an office by being placed in flexible office space, for example.
Though some coworking spaces may focus on providing larger markets, spaces like Craftwork are intently focused on one to 10 people – whether it’s remote workers, gig workers or small businesses (SMBs). Such spaces have the advantage of a smaller footprint. With this size, spaces like Craftwork can work in more sprawled areas of a city: By comparison, a lot of coworking spaces, by necessity, have to be in denser areas.
In the big picture, Hightower thinks the coworking industry is only in the first or second inning. There’s still a huge opportunity for different options, Hightower said, but it’s important for coworking spaces to know who they are and in what they are excellent. In the case of Craftwork, that’s operating integrated coffee shops and coworking spaces in multifamily apartment buildings. (To that end, Craftwork acquired a company called WorkFlourish, which specializes on coworking spaces inside of residential buildings and plans to close a Series A round of $3 million this month.)
In the end, the company’s goal is to be the leading space-as-a-service provider in multifamily buildings and have locations all around the country. It also seeks to fill an important need: bringing people together and battling the loneliness epidemic.
“We’ve never been more uprooted and disconnected as a culture and society,” Hightower said. But, with spaces such as Craftwork, remote workers and gig employees may be able to feel a part of a community — and the workforce as a whole.