When the COVID-19 pandemic hit in March, it upended the business model for much of the nascent coworking industry, which hinges on collaboration, communal desks and shared spaces.
One local firm, no newcomer to the shared space sector, senses an opportunity.
Jeff Reinstein, chief executive of Irvine-based Premier Workspaces, realized that competitors were starting to shy away from the prevalent coworking model of the past few years, which emphasized large, open spaces. Instead, they were reconfiguring open space into private offices to promote distancing.
“This is where we have a huge advantage,” said Reinstein, noting that Premier has been prioritizing private offices throughout the company’s nearly 20-year history.
Premier, previously known as Premier Business Centers, counts 90 locations in the U.S., totaling nearly 1.5 million square feet. In OC, it has nearly 440,000 square feet and vies with New York’s WeWork as the area’s largest shared space operator.
“With an exclusive focus on private offices and virtual plans, our centers were already designed for social distancing,” Reinstein said.
This made the transition much easier for Premier when coworking companies were forced to adjust in the wake of stay-at-home orders. Some of those businesses have not been able to reopen or have shuttered operations altogether.
Sources indicate Premier is close to finalizing a deal for a location left vacant by a competitor, and additional similar deals could be on the horizon.
“We’ve been in communication with several landlords who are interested in having us reposition these distressed locations,” Reinstein said.
Joint Deals
The shared space sector has nearly tripled in size in Orange County over the past three years to some 3 million square feet of leased space.
Nearly 200,000 square feet of that space has already been given back to landlords during the pandemic, as the industry has fought to keep its footing members work from home, and safety precautions keep many locations shuttered, or operating at a shrunken capacity.
In addition to WeWork’s notable local giveback of a full-building, 116,000-square-foot spot at Spectrum Terrace, Australia-based Servcorp and Connecticut-based Work Well Win are giving back their local spaces as a result of internal company struggles that were exacerbated by the pandemic.
“This is a difficult industry with tight margins. Many operators were on the edge going into the pandemic, so we’re seeing an increase in defaults,” Reinstein said.
Brokers and industry watchers have forecasted some of the better-performing coworking companies—those with experience in downturns, or cash reserves—to avoid consolidation and fill vacancies.
Premier’s potential new lease—reported to be in Newport Beach—marks the expansion of a new strategy for the company, in which it will manage locations on behalf of landlords in a partnership deal.
“As a company, we have a strong track record in this space. We’ve been successful in this area for many years and we commonly partner with landlords in a management or consulting capacity,” Reinstein said.
More local additions may be announced in coming months, he said.
Coworking Amenity
As part of this new push, Premier recently announced plans for a location it’s opening in partnership with the developer of a luxury apartment building in Woodland Hills.
The space, branded as Q Work, is a 6,000-square-foot workspace within the 241-unit The Q Variel Luxury Apartment Community, which was developed by Canoga Park-based California Home Builders and opened this year.
“We’re excited to collaborate with the developers of The Q to release a project that’s both innovative and engaging. This new office space will be the first of its kind, located within a luxury apartment community that shares our dedication to hospitality,” said Michael Pollack, vice president and director of real estate at Premier.
The location will include 37 private offices, coworking, meeting rooms and common areas.
“It’s a natural partnership that will allow the two brands to meet the shifting needs of remote and corporate workers who prefer to work closer to home.”
