SoCal Startup Focuses on Coworking Space in the Suburbs

A Southern California coworking startup is taking a somewhat novel approach to growing its footprint, which is the process of expanding into Northern California: the firm focuses on flexible workspace in the suburbs—for a growing number of remote workers who don’t want to work at home.

TailoredSpace, which was launched in 2019 by Drew Sanden, a commercial broker, has been rapidly expanding its network of office campuses in SoCal offering flex coworking and communal spaces for fixed-price monthly memberships.

According to a report in the Orange County Register, about 80% of the company’s members live within a five-mile radius of a TailoredSpace location, including in Brea, Carlsbad, Chino Hills, Corona, Rancho Cucamonga, Riverside and West Covina.

The common threads between these communities include populations with high per capita income, convenient freeway access, and shopping and dining options all within easy walking distance. The company is planning to open new spaces later this year in San Juan Capistrano and Santa Clarita.

In an interview with the Register, Sanden said he believes the post-pandemic is at an inflection point, underscored by a recent Cushman & Wakefield report which projects that by 2030, the US will have an estimated 1.1B SF of empty office space, a 55% increase from pre-pandemic levels.

”There’s a transition going on—a lot of right-sizing, contraction, even closing of offices. Everyone is trying to figure out what the new norm is moving forward, and to some degree, we’ve benefited from that in these suburban markets,” Sanden told the newspaper.

“Companies are offering their employees the flexibility to work remotely, and because of that, not everybody has the ability to work from home. We have kids, we have dogs, it’s challenging. And so, we’re able to provide space close to our members’ homes where they can pop in and out. That gives them the flexibility they’re looking for,” he said.

TailoredSpace works with landlords through a management agreement rather than a traditional lease. The company takes on the full-staff operation, while the landlords handle the upfront costs of tenant improvements and “accessories,” which include furniture, fixtures and equipment.

Memberships range from a virtual plan starting from $75 per month to a coworking desk starting at $225 per month. Those who require a private office or a customized suite (with moveable walls) can choose from plans that run $650 per month.

Memberships include access to common areas; conference spaces start at $50 an hour.

According to Sanden, TailoredSpaces generally “starts from scratch” at its locations and guts them significantly to adjust the layouts to work with its model.

“The landlords generally cover the bulk of the expense. We work with the landlords from the design all the way to the operation. We’re kind of a third-party operator of coworking and executive suite space, and this is become the norm,” Sanden said, in the interview.

“Most of the larger operators, whether you’re talking Industrious or WeWork, are all pushing toward a management structure as opposed to leases,” he said.

“Landlords realize that even under a lease structure, they’re still putting out a significant amount of capital for tenant improvements. So, for a little additional capital, it gives them the opportunity to share in the upside,” Sanden told the Register.