The buildings are then converted to loft-style spaces that can be used to work, live or both.

A Growing Footprint

New stats coming out of Q2 suggest this is not the best time for a pure-play co-working company to enter the market. There are already a number of such providers in the Washington DC area now, including WeWork, MakeOffices, Spaces and Eastern Foundry and their footprint now totals over 1.8 million square feet.

To be sure they have made rapid inroads in the market -- for the last eighteen months they have been driving nearly half of the expansionary leasing activity according to JLL.

Year to date, some 15% of leasing activity in the area year has been due to co-working, according to a separate report from CBRE.

Saturating Washington DC?

In recent weeks, there have been suggestions that the local market may be saturated now -- or more likely, that the co-working community beginning to struggle with the same absorption problems as traditional office buildings: CBRE also reported in its Q2 analysis of local activity that while co-working was a driver of demand in Q1, it recorded almost 5,000 square feet of negative absorption in the last three months.

A Different Model

E-lofts, it should be noted again, is distinguishing itself in the crowded co-working space by redeveloping vacant office buildings into lofts that can serve as both work and living space -- that is, it is blending the WeWork and WeLive models into one building giving tenants a choice which they prefer.

At a rent of $2.50 per square foot, e-loft noted that its space is competitive with apartment living. Its concept provides maximum flexibility for NOI as the asset can be monetized for multiple uses, it also said in its Q&A. In addition, it argued it doesn't have direct competition because of its blended model.

E-loft is already planning for the long-range, with plans to open 50 to 100 locations over the next five to 10 years with a public exit strategy. That final play -- a public exit presumably via an initial public offering -- seems a bit ambitious at this point. Even WeWorks is reportedly hesitating about whether the market has an appetite for a public version. Back to the present, though: e-lofts says it will tap a combination of internal capital, external partners, traditional real estate debt and equity financing to pay for its acquisitions and building redevelopment.

WASHINGTON, DC-A provider of flexible work and living space is entering the Washington DC market with hopes to take its business model nationwide and ultimately cash out via a public exit strategy. The company is called e-lofts and it is owned by Novus Residences, a wholly owned subsidiary of Cafritz Interests.

E-lofts is opening its first location, called e-lofts Alexandria, next month at 4501 Ford Ave. in Alexandria, VA, which it purchased last year and renovated for $50 million. E-lofts plans to locate its headquarters there.

There are five additional locations planned for the Washington, DC metro area. The locations haven't been selected yet as the company is still scouting out acquisition possibilities.

It is looking for a specific type of building that can accommodate both residents and office tenants: namely, empty offices with tall ceilings, big windows, open floor plans and office compliant parking, according to a written Q&A e-loft provided GlobeSt.com. “We are taking an asset class with declining usage and works with the local jurisdictions to create flexibility in zoning that generates scarcity of product (cool lofts) and maximizes demand (live, work, live/work),” it said.

The buildings are then converted to loft-style spaces that can be used to work, live or both.

A Growing Footprint

New stats coming out of Q2 suggest this is not the best time for a pure-play co-working company to enter the market. There are already a number of such providers in the Washington DC area now, including WeWork, MakeOffices, Spaces and Eastern Foundry and their footprint now totals over 1.8 million square feet.

To be sure they have made rapid inroads in the market -- for the last eighteen months they have been driving nearly half of the expansionary leasing activity according to JLL.

Year to date, some 15% of leasing activity in the area year has been due to co-working, according to a separate report from CBRE.

Saturating Washington DC?

In recent weeks, there have been suggestions that the local market may be saturated now -- or more likely, that the co-working community beginning to struggle with the same absorption problems as traditional office buildings: CBRE also reported in its Q2 analysis of local activity that while co-working was a driver of demand in Q1, it recorded almost 5,000 square feet of negative absorption in the last three months.