With millions of Americans jumping onto video calls for the first time as working from home becomes the new normal during the novel corona pandemic, coworking space operators are feeling the heat.
While large and popular operators like WeWork battle it out with employees as to whether or not to keep their over 800 locations open as COVID-19 cases increase among their fleet, Black operators, who run a collective total of over 70 coworking spaces nationwide, are still determining what the future holds as the growing pandemic has no end in sight.
KEY TAKEAWAYS
- More tenants opt to work from home vs. their coworking space.
- Operators are attempting to move training and community connection online.
- Event revenue for coworking spaces plummets.
When Karen Burton opened SpaceLab in downtown Detroit in 2017, she was one of several business owners playing a role in revitalizing the city through creating a space for other entrepreneurs and innovators to work. And when she expanded into a second location just 10 minutes away in northwest Detroit last summer in partnership with Detroit Cabinet Manufacturing, SpaceLab’s continued growth and presence in the city, appeared to be imminent.
But now, as social gatherings are being limited across the nation, and major cities go into complete lockdown to quell the spread of the virus, coworking spaces like Burton are at risk of completely falling victim to canceled tenant leases and refunded space rental deposits.
“Although we haven’t had anyone say that they aren’t going to stay on, we did have four events that canceled. Those were really big events and would have brought in significant revenue. That hit us kind of hard,” said Burton.
Last week, Burton hosted a virtual coffee chat with the Space Lab community to help foster connection, share resources, and provide much-needed pep talks.
“[We’re] just having to pivot and look at new ways to engage people and finding out what their needs are,” said Burton.
SpaceLab is still seeing some light activity with tenants who have independent offices, still coming in to work. She’s aggressively wiping down surfaces and encouraging people to be safe and sanitize as often as possible.
As overall presence declines, Burton will continue to remain open, offering day passes, conference rooms, and general meeting space. However, hours for mail pick up for those who use SpaceLab for business mailing will slim with pick up happening by appointment only.
Other coworking spaces in the area have already closed up shop, including Tech Town on Wayne State University’s campus.
How long SpaceLab and its counterparts keep their doors open remains to be seen. Burton says she’s looking at the available loan programs from the Small Business Administration and into possible grants—opportunities she’s also planning to compile and share with her coworking tenants.
Less than 600 miles away, Aaron Saunders, founder of the Inclusive Innovation Incubator (In3) coworking space in Washington, D.C., is determining how to take his programming online.
With over 8,000 square feet of space, the 50 desks that occupy the building’s main entrance has less than 10 people working at any given time. Saunders is less concerned about managing social distancing among members who have access to the building 24/7, and much more focused on the discontinuation of special events which drives the majority of the revenue for the location.
In addition to receiving support from the Mayor’s office for STEM programming, workshops and event rentals are key to In3’s culture. Now, coding trainings are being shifted online. It’s upcoming all-day women’s program will be forced to operate remotely.
Saunders has asked his part-time staff to stay home as In3 remains closed to the public over the next two weeks. The shutdown includes having to call off an upcoming event that would have brought in $7,000 of revenue.
The timing of the pandemic and subsequent shutdowns on social life couldn’t have been more misaligned. In3 is slated to renew its three-year lease as early as July this year.
“We’re going into our 3rd year [of operations] and we were hitting our stride. Membership was going up. People were starting to get it,” said Saunders who’s been operating In3 with Howard University as his landlord.
When Saunders first open the doors to In3, locals were still getting acquainted with the concept of coworking. Ironically, Saunders said he’d frequently get asked if In3 is the Black version of WeWork, but now says the company’s recent quarrels have been a boon to membership at In3.
Saunders is hopeful that funders and investors will stick to a plan toward inclusion as they make funding decisions over the coming months. He’s concerned that the economic downturn will negatively impact people fo color much worse than others, including those who are entrepreneurs.
“We were on the path to raise funds for In3 to support two more locations. There’s still interest. We can’t afford to lose the momentum we’ve already built,” said Saunders who is bracing for upcoming discussions with the city and other institutions.
Despite a bleak present, the future looks promising to Saunders on the other side of COVID-19. In his conversations with foundations and other potential funders and partners, Saunders is making the case for the significance of intentional, and inclusive community—one that will matter much more as the pandemic forces everyone to evaluate what community means. He advises that funders not turn from their commitments to fund spaces designed specifically for people of color in innovation where they can turn to for support, mentorship, and community.
“We are the safety net. We are where the entrepreneur is going to go to find the community and support they need to get through the rough times. And this is the rough time,” said Saunders.
