Co-working options are popping up all over the city. Can the market support so much togetherness?
Molly Eyerman operated her HR services and recruitment consulting firm for about one-and-a-half years without a business office before slow, steady employee growth made staff meetings increasingly difficult. As it happened, a client, April Zimmerman Katz of the Zimmerman Companies, a Columbus property management and real estate investment and development company, had a solution.
Late last summer, Katz started moving forward with plans to renovate the former Zaner-Bloser office building at 1201 Dublin Road into Versa, a flexible co-working facility offering closed offices, open tables serving as work stations and a variety of business services and amenities. Eyerman was one of her first tenants.
Katz says she first began investigating the co-working concept less than two years ago as local small businesses and Fortune 1000 companies alike began seeking out the venues. “It was a concept I was intrigued about,” says the president of a business that had operated indoor tennis clubs, apartments and, until a few years ago, a swim club for 40 years. “We managed property where people lived and played,” Katz says, “and now it's where they work as well.”
Co-working or similar offerings geared toward executives and smaller professional businesses have dotted Columbus in the corners of suburban and Downtown buildings for numerous years. Research from the CBRE commercial brokerage shows 10 locations in 2010 took a combined 100,000 square feet. But burgeoning demand has changed the market. By late January of this year, 43 locations occupied just under 496,000 square feet combined. With another five sites in the works, the number could rise to 564,000 square feet before the end of the year.
Much of that interest has centered around Downtown, the Short North and other central city locations such as Versa's space just outside Grandview.
“For a middle market [like Columbus], there's been pretty astounding growth,” says CBRE office agent Philip Pelok, who represented Switzerland-based International Workplace Group's Spaces network in a 42,000-square-foot lease at 711 N. High St. in the Short North. Pelok attributes a significant portion of the growth to the city's growing hip and tech-savvy reputation. “It's all coming together,” he says, “to create a buzz.”
Co-working facilities typically offer open floor plans, flexible space commitments, shared kitchens, secure internet service and access to conference rooms and space for events and seminars. The concept “is geared toward that person wanting an environment of collaboration,” Pelok says. “You may be in different industries, but you're still like-minded entrepreneurs with a desire to grow the business.”
Scott Pickett, the Columbus principal at the Avison Young real estate brokerage that markets the High Street property, says the co-working demand comes amid changes in corporate accounting standards that encourage shorter-term leases. That demand and other corporate factors also have made the co-working office hosts more creditworthy as tenants for landlords than traditional executive office concepts offering fewer guarantees to meet lease terms. “The financial model,” Pickett says, “has changed.”
A variety of national and local players now compete in Columbus. New York City-based Industrious formally introduced the market to the upscale end of the phenomenon in mid-2015 when it staked out 10,000 square feet in Pizzuti Cos.' offices at the Joseph in the Short North. “They've been full ever since,” says Pizzuti President Joel Pizzuti.
In 2016, Columbus entrepreneur Matt Davis and partners Joel and Elisabeth Limes created their first CoHatch co-working location on the floor above the shuttered Zettler Hardware store at 659 High St. in downtown Worthington. In November 2017, CoHatch expanded its Worthington presence by opening another location in a long-shuttered library. It now expects to open a downtown Delaware location.
Startup companies represent just 10 percent or so of CoHatch's base in Worthington, Davis says, dispelling the view co-working is little more than an incubator. The Worthington client base includes lawyers, accountants and real estate-related businesses. “CoHatch is designed around people and their priorities and to help them live their ideal lives in the town they want to live in,” he says. “It's anyone with a small business who's already successful.”
The local Serendipity Labs franchise opened in September in a full floor of the Fifth Third Center in Downtown Columbus. Next up is a second, larger facility taking up half of a speculative commercial property Elford Development has under construction in the Short North.
Serendipity franchise partner Trevor Warner says he expects the two locations that are just 2½ miles apart to attract a different mix of businesses. The Downtown property has attracted primarily large corporate clients and professionals wanting proximity to the Statehouse and state and local government offices. “You're Downtown for a reason,” he says. “In the Short North, we expect fewer Fortune 1000 businesses and more of a local business flavor—attorneys, accountants and others—looking for better work, live and play space.”
CoHatch has raised $2 million to expand the concept to another 10 sites in Columbus during the next four years while also launching franchising in other markets. It has identified Springfield as its first franchise opportunity, and in early April, CoHatch announced that space above the Carsonie's Stromboli & Pizza Kitchen on Lane Avenue close to Northwest Boulevard as the first expansion space financed through the recent capital infusion.
All of this activity raises the question: How much co-working can the market support? “I know it feels like a lot of competition, but I feel confident the demand is coming,” Katz says.
Brian Ball is a freelance writer.