Why WeWork is relevant for retail property

Nick Thornton, Director, Aver

This article first appeared on CoStar on February 25, 2019

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We moved into new offices at WeWork’s Aviation House in Holborn last December.  Personally, I did so with some reluctance, having been based in a very different version of a managed office some years before.

Nearly three months on, what do I think?  We should have made the move sooner.  More than that, however, I believe there is much for the retail property sector to reflect on in the success of WeWork from an occupier’s perspective.

WeWork sells an experience, not bricks and mortar.  The space is part of what we have bought in to, but the real difference is the culture that emanates from every contact with the brand and its team.  The day we moved in, we all went home with WeWork-branded tote bags, pens, pads and tee-shirts.  The complimentary beer available five days a week is served in WeWork-branded stainless-steel cups, many of which I am sure end-up at home too.  As we were being sold the space, at no point did floor areas enter the conversation.  The focus is on the number of people one needs space for, and the experience the building’s culture will create for them.

They do critical mass very well and use it very effectively to create a community.  The free beer (and prosecco on Thursdays and Fridays) is more than just a gimmick.  The social dynamic it helps to create, along with the quiz nights, guest speakers and yoga classes, builds a desire amongst people working in the building to spend time enjoying it before and after work.  The day we moved in, 1,000 people did so too.  By the time our building is fully occupied, it will be home to 2,700 people.  Some evenings at 7.30pm, it feels like all of them are socialising on the ground floor, which WeWork has created as a communal space.  It is quite common for our team to meet friends for a drink in the office before heading out for the evening.  And it is not just the lure of free alcohol: the coffee is good (and also free), and that encourages interaction throughout the day.  The sense of belonging is tangible, as is the pride it generates.

Perhaps most crucially of all for retail property landlords, however, WeWork delivers its experience, culture and community through people.  Not only are there lots of very visible WeWork staff throughout the building, they are friendly, effective and interested.  Faces become familiar and names are remembered, and that makes the time spent in the office even more of an enjoyable, social experience.  And whilst there is tech at play, it is used as a facilitator of the experience, supporting the WeWork people in fulfilling their roles, rather than being an answer in and of itself.  We have all downloaded the WeWork App and uploaded our profiles, but the way WeWork communicates with us, and the way we interact with people five floors away, is consumer-led in its tone, content and ease of use.  The tech is a way to make and maintain contacts, share news and socialise, rather than a dry business tool telling us to be ready for the fire alarm test.

So why is all of this relevant to retail property?  In an industry dominated by more questions than answers at the moment, WeWork is a disruptor that shows taking an alternative approach to the norm brings commercial benefits.  Their approach, however, is revolutionary in its application to the office sector, not in what it consists of, which is why it is something for retail property to reflect on.

Rather than talking about focusing on a great experience, WeWork does it.  Instead of trying to be part of a community, WeWork creates its own, which is then grown organically by every new team that moves in.  And rather than relying on technology to be the experience, WeWork places the emphasis on people to do it.  They have created a very successful brand from an occupier’s perspective, one based on very traditional building blocks that have been around in retail property for decades.  Doing so with such commitment, however, has given them an edge.

Is it not time our sector revisited the basics with a similar sense of purpose?