The global office-sharing company WeWork and several hundred of its affiliates recently filed for Chapter 11 bankruptcy protection in federal court. The case was filed in the US Bankruptcy Court for the District of New Jersey on November 6. This comes amidst a general upswing in the co-working space industry, with other major players showing strong financial growth.
While WeWork is filing for bankruptcy, the overall state of the flexible workspace sector appears optimistic. The co-working space’s news comes amid a relatively positive landscape for the flexible workspace sector as a whole. According to Axios, other co-working players such as IWG and Industrious both have strong balance sheets and see business on the upswing. "Enormous numbers of customers are moving out of the long-term lease space" into flexible office arrangements, Jamie Hodari, founder of Industrious, said in August.
In fact, IWG's financials paint an encouraging picture for those in the industry. According to Business Matters Magazine, the workspace provider IWG, which owns Regus, a global network of co-working office spaces, earned a record $2.1 billion in system-wide revenue in the first half of 2023. This represents a 16 percent year-over-year increase.
Besides IWG and Industrious, there are other significant players in Chicago-area co-working market. Industrious has seven locations in the Chicago-area and Regus has 27 locations, according to their websites.
The co-working lounge and social club Enclave is also on the upswing in the Chicago-area. The brand distinguishes itself by offering a unique combination of coworking space and a social lounge, catering to suburban professionals seeking a flexible and dynamic workspace.
Enclave has made membership prices accessible to accommodate different budget ranges. Membership prices at Enclave start at $100 per month, which allows members access to amenities such as conference rooms, phone rooms, the main area, as well as complimentary coffee, tea, and high-speed internet. Members also have the opportunity to participate in social events across all Enclave locations, further enhancing their networking opportunities.
In 2023 alone, Enclave has opened multiple new locations. With a total of eight locations in the Chicago-area, the brand opened four new offices in 2023 alone. Its newest office is in Lake Forest, a suburb of Chicago, which opened on November 1. This marks the eighth location for Enclave, following successful openings in Glen Ellyn, Downers Grove, Oak Park, Arlington Heights, Highland Park, Wilmette and Naperville.
The rise of remote and hybrid working since the COVID-19 pandemic has had an observable effect on co-working trends. There has been a boom in remote and hybrid working situations since the start of the COVID-19 pandemic in 2020 according to WFH Research reports. As of 2023, 12.7% of full-time employees work from home while 28.2% have adapted to a hybrid work model. A hybrid model is a combination of both home and in-office working, offering flexibility and maintaining a level of physical presence at the workplace.
The U.S. Census Bureau has reported dramatic increases in the number of people primarily working from home. According to a report from the U.S. Census Bureau, the number of people primarily working from home tripled between 2019 and 2021. The 2021 American Community Survey (ACS) reports that the number jumped from 5.7% (roughly 9 million people) to 17.9% (27.6 million people) in just two years.
Similarly, there has been an increase in the total number of co-working spaces available. Just as quickly as the number of remote workers has soared, so too has the number of co-working spaces. According to a Coworking Industry Report for the third quarter of 2023, there are a total of 6,172 co-working spaces in the United States– that’s a 67% increase from 2020 when the number of spaces was roughly 3,700 according to Coworking Resources reports.
WeWork continues its presence with several locations across Chicago despite recent developments. WeWork currently has nine Chicago locations including a number in West Loop and Near West Side, according to the company’s website.