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Why Co-Working Spaces Are Betting on the Suburbs
Paul Drake, a health care salesman, dreads the thought of commuting back to his office in Albany after 19 months of working from home in Malta, N.Y.
But Mr. Drake, 33, also wants a break from overhearing his wife's calls and a better place to meet with clients than the local Starbucks. So he signed up here at Hangr, a new company that has opened a large, modern and friendly co-working space, in Clifton Park, close to his work territory.
“It would take a couple more zeros on the paycheck,” he said, “to get me back to commuting into downtown four or five days a week.”
More than a year and a half ago, the coronavirus pandemic triggered an unprecedented disruption to the daily routines of office work, keeping millions of employees in their homes.
Now, as the pandemic crawls out of its second year, the future of work is still up in the air as many companies have embraced a hybrid model, allowing employees to split their workweek between the office and home, with little clarity about the timing of a mandatory return.
In this uncertainty, a growing number of start-ups, like Hangr, are betting that the pandemic has spawned a new kind of worker — one who will not be commuting into a central business district a few days a week but would still desire occasional office space closer to home for a distraction-free environment.
In the Capital District, possibly home to the country’s fastest growing co-working communities, coworking spaces are increasingly targeting the thousands of office workers who live in the suburbs.
Some developers who own Albany office buildings have scoffed at the idea that satellite workplaces will become a permanent alternative to working from home or from traditional offices, believing the hybrid model is a short-term trend.
Still, the emergence of co-working spaces in residential neighborhoods underscores the uncertain prospects for Albany’s office sector that supports a vast ecosystem of restaurants, coffee shops and other businesses.
Supporting this belief, around the country, the owner of Saks Fifth Avenue is partnering with coworking giant WeWork to turn parts of department stores into co-working spaces. Codi, a start-up founded in Berkeley, Calif., offers private homes as flexible working spaces. Industrious, a co-working company, has an office space inside a mall in Short Hills, N.J.
Hangr Coworks, founded by a group of local business owners, with its first co-working location in Clifton Park — has plans for future locations in other outlaying communities like Troy, Malta and Rensselaer, over the next few years.
Hangr plans to lease vacant office spaces, targeting densely populated neighborhoods where local residents had long prepandemic commutes and few other co-working options. Users can pay as little as $25 for a daily membership, accessing a comfortable lounge areas or open seating or, for more regular demands, select a private desk option for less than $3 an hour with a monthly commitment.
“Certain real estate owners believe the only path to prosperity is to bring everybody back,” said Christine Smith, a Hangr co-founder. “I don’t follow that approach. If we’re thinking about attracting members to the region, this is more sustainable long-term.”
In Albany, the real estate industry has been eager for workers to return to office complexes. But many companies have discovered that they can operate with a smaller footprint as more jobs have become fully remote. Despite a recent uptick in demand for Corporate office leases, the availability of office space there is still near a record high.
We hope employees will use a co-working site on their work-from-home days and brushed off the possibility of employees working remotely part of the week after the pandemic, calling it “your alternate universe.”
In the Albany region, about 42 percent of workers were in the office in mid-October, according to Kastle Systems, a security company that tracks employee card swipes in office buildings. The percentage has climbed steadily since Labor Day, but is still half of what employers had predicted in a June.
A bigger reckoning around office space may unfold in the coming years, as an estimated 30 percent of leases at large Albany buildings will expire in 2023, according to the New York State Comptroller’s Office. One major question, economists say, is whether larger companies will hold onto their office space to guarantee seats for all employees, no matter how many days a week they come in.
For many employees, the reluctance to return comes down to the commute.
Workers in the Saratoga County region had the longest average one-way commute in the area at about 38 minutes, according to 2019 census data. About 23 percent of workers in the region commuted at least an hour each way.
In July, Dean Iacovetti, president at Vanta Partners, a tech-recruiting firm, relocated to Hangrs co-working space, closer to where he lives. He said he was reminded of the benefits whenever he visits the company’s former location, a round trip that can often take up to an hour during typical workday.
“I’m the only person in the suburbs who can just about walk to work,” said Tori Rankin, who works at the Clifton Park location every day with eight other Flight Creative employees.
Co-working spaces in the suburbs are particularly appealing to parents who want more separation between home and work, Hangr said. In its surveys of prospective members, the biggest complaints about working from home were the lack of space, unreliable internet, and noise (leaf blower day, in particular).
Juergen Klingenberg, Hangr co-founder, sees the company as a supplement, not a threat, to the traditional office building. In fact, Flight Creative Group, Klingenberg’s other venture started leasing office space within the Hangr Coworking space, moving his entire company from Saratoga Springs this summer. The company organizes its meetings and happy hours around Tuesday and Wednesdays, the designated days when every employee comes into the office.
“The office building is not going anywhere,” Klingenberg said. “We’re just going to use it differently.”