Co-working, or office spaces used by multiple different companies, is an international trend that has taken off over the last few years, and Kansas City has experienced its impact. Possibly the two most visible examples are Plexpod Westport Commons, in the former Westport Junior High School on 39th Street, and WeWork, the shared-office giant, in the 10-story historic Corrigan Station in the Crossroads, with its punctuated signage.
WeWork last week announced it is going to open its second Kansas City location, 101,000 square feet over two floors of what was formerly known as City Center Square, at 1100 Main St.
So where is the metro area at in terms of shared-office space, which is often used by startups and other small firms that don’t want to take on a long-term lease? Is there too much or not enough?
“This is a pretty good Goldilocks situation,” said Brian Bacon, a vice president in the Kansas City office of international brokerage firm CBRE. “We’re not too hot, and we’re not too cold.”
Including the new WeWork addition, according to CBRE data, there is now 830,000 square feet of co-working space in the market, accounting for 1.6 percent of its 52.2 million square feet of total office space. And it is fragmented by operator, with 17 different providers, including WeWork, Plexpod, and Regus, which is the world’s largest in the sector. (A subsidiary of Los Angeles-based CBRE called Hana is also an operator of shared-office space, though it does not have any Kansas City locations.)
The 1.6 percent share of total office space in Kansas City, puts its a bit lower than some other regional markets. St. Louis was at 1.9 percent as of last year’s third quarter, while in Columbus, Ohio, it totaled 1.8 percent. Detroit and Louisville were on the low end of the Midwest, at 0.5 percent each. Meanwhile, WeWork is reportedly the largest single tenant in Manhattan, in New York City; London and other major metros.
Shared offices seem to be a “wave of the future,” said Jeff Spencer, senior vice president at health-insurance agency Holmes Murphy & Associates, which is a tenant in Corrigan Station, along with WeWork. In his estimation, the trend might be a good one for small businesses in an early expansion mode trying to make an impression on clients. “It means you at least invested some money to find a place and put down some roots for your company,” Spencer said.