Rent-A-Desk Scene Heats Up
As the number of local co-working communities doubles, work-space owners must get creative to stand out.
Five years ago, Tony Bacigalupo, a project manager for a Web development firm, started stationing himself in cafés in Manhattan along with other comrades who had been working from home.
In 2008, Bacigalupo co-founded New Work City, a business tapping into the growing co-working trend. It now provides desk space and access to events and discussion groups to professionals and artists for a $30- to $300-a-month membership fee in a 4,700-square-foot location in lower Manhattan.
"I wanted to build a place that was as much about people connecting to each other as providing a work space," he said. With about 150 members, the profitable one-employee company has "under $1 million" in revenue, he said.
Bacigalupo isn't alone. With about 62 locations, up from 28 a year ago, mostly in Manhattan and Brooklyn, New York City is the co-working capital of the world, according to Carsten Foertsch, co-founder of online publication Deskmag, which covers the topic.
Equal parts real estate solution and social movement, these businesses provide both a place to work and the opportunity to share ideas, expertise and gossip with fellow freelancers and startups seeking affordable space. The availability of inexpensive laptops and mobile technology makes it easy for clients to work this way. "Fifteen years ago, you were trapped in a regular office," said Foertsch.
At the same time, however, turning a co-working site into a profitable concern is difficult in New York. "Rents are pretty steep," said Bacigalupo. There's also potential for oversaturation of the market.
The bulk of revenue for most co-working sites come from membership fees, usually tiered and allowing different levels of access. Take 5-year-old, two-employee Green Spaces, a 6,000-square-foot Manhattan site aimed at environmental and social entrepreneurs, according to co-founder Marissa Feinberg. Options include access to one of 45 dedicated desks that only its 150 members can use for $550 a month.
Hosting frequent events for members and nonmembers, as well as renting out the location for film screenings and the like, often provides additional revenue. Green Spaces rents out its site on weekends to groups offering programs on such topics as how to run a sustainable business. Speakers and other professionals also pay to use the location after-hours for workshops. It's also starting to sell $50 monthly memberships, offering access to an unlimited number of events.
Such activities contribute 20 percent to 30 percent of revenue, which are "under $1 million," according to Ms. Feinberg, whose company is profitable.
Holding gatherings also helps create a sense of community, a key to running a thriving space, said Foertsch. To help his members connect, Nick Robalik, founder of Bitmap Creative Labs, a 2,500-square-foot space in the Williamsburg neighborhood aimed at architects, graphic designers and the like, also usually assigns desks so that people in complementary professions are neighbors.
"We encourage collaboration," said Robalik, whose company, with "less than $1 million in revenues," is breaking even.