The Next Big Thing in Office Space: Neighborhooding

NEW YORK CITY—The way people work is changing, and has been for some time. Companies like Google, Apple and Amazon have responded to this sea of change by developing sprawling campuses with holistic designs. While sponsored bike paths, napping rooms and restaurants are great, not every company has the financial firepower or infrastructure to bring them to life. That said, this trend won’t be inaccessible for long. Companies of all shapes and sizes are recognizing the inefficiency of trying to create top-flight amenities in-house.

Welcome to “neighborhooding,” the sharing economy for commercial real estate and the next big innovation in flexible space. Why? Because the workplace is still evolving rapidly and companies are beginning to demand it.

The Growth of Flexible Space

The shift away from traditional office space began with co-working, which filled empty offices with desks, WiFi, kitchens and kegs. Freelancers and seedling companies in need of space suddenly found easy solutions that permitted extreme flexibility (such as options to leave with a month’s notice), and gave access to spaces that were only needed occasionally, like conference rooms.

However, an even greater need in the market persisted—spaces with flexible terms that catered to larger businesses—and that’s where Knotel saw an opportunity. Dedicated space, on flexible terms, with infrastructure and amenities included, such as the company’s own branding, furniture, IT, cleaning services and space operations management. When businesses needs change, as they inevitably do, expanding within the building or to another property in a provider’s portfolio provides unparalleled risk mitigation. No subleasing, no new search, no buildout, no negotiations.

If You Build It, They Will Come

The next innovation? A platform that offers the same flexible office terms with the addition of purpose-driven spaces in the neighborhood that unlock employee potential and facilitate growth. As the world moves towards amenity-driven spaces, companies will be able to provide their people with a campus-like feel, in spaces that cater to specific, differing work styles and functions to help them work their best.

Soon, our member companies will be able to tap micro-amenities on the Knotel platform such as strategically located coffee shops, private meeting rooms, wellness spaces, white glove event space, social clubs and more.

Knotel’s first member-only space in Union Square, Gather, fits 150 people and can be used for all-hands meetings, private events and collaborative work. We have other spaces focused on creativity, innovation, and wellness on the near horizon.

Benefits Without Buildouts

By treating neighborhoods as campuses, everybody benefits. Employees enjoy being a part of a dynamic ecosystem. Small business owners, from office supply stores to shops to bars, welcome human (and economic) additions to their neighborhoods. With the ongoing decline of retail and the simultaneous expansion of the gig economy, vacant storefronts are becoming engines of opportunity for landlords. Plus, property values climb in vibrant communities.

Traditional real estate models just can’t contribute to this vibrancy in the same way. It’s not just because of the significant opportunity cost of constantly tearing down and redoing buildouts. Opportunities drift away. In addition, the construction work itself brings construction-related vehicles and congestion, building materials, noise and dumpsters. Costly and disruptive buildouts can be avoided with flexible offices, since tenants can transition from one space to the next with little disruption.

For the Good of the Neighborhood

A vibrant office community contributes substantially to whether a neighborhood thrives or declines. To grow and flourish, neighborhooding provides a refreshing, sustainable and flexible approach to the modern work environment.

Knotel was built from the ground up by answering a demand in the marketplace that continues to evolve over time. As we scale up, our mission continues to be anticipating what companies need to be their most productive. With neighborhooding, the next extension of flexible office space, we’re providing the versatility that companies need to do their best work.

David Jones is the VP of operations and workshops at Knotel, a flexible workspace provider. Founded in 2016, Knotel is based in New York City, and also has offices spaces in San Francisco, London, Los Angeles, Berlin and Brazil. It currently operates with more than two million square feet across more than 100 locations. The views expressed here are the author’s own and not those of ALM’s real estate media group.