The latest thing in the suburbs? Co-working offices.
Crain’s | October 27, 2017
As a freelance writer and marketing consultant, Patti Minglin’s morning routine had more than a sense of urgency. After sending the last of her three children off to school, she had to get to the local Starbucks in Naperville in time to land a chair near an outlet that would allow her to plug in her laptop and work through the morning, fueled by coffee. There were plenty of other solo workers seeking to escape from home offices lined up for seats each day.
These days Minglin no longer dashes to Starbucks from her home in Aurora. She has joined a startup co-working development aimed at female entrepreneurs like herself, called Klique Creative, on the second floor above a jewelry shop in downtown Naperville. Minglin, 48, who used to be associate publisher at Chicago Parent magazine and now owns Go Girl Communications, works most days at a communal table along with other writers, web designers or public relations consultants sealed off by their earbuds. “It’s a very creative environment,” she says.
In big-city downtowns, co-working spaces have been an option for members of the gig economy for several years. Now co-working is coming to the suburbs. People who have found home offices claustrophobic and coffee shops too public are seeking shared office spaces where they can park their laptops all day long for a fraction of the price of a conventional rented office and maybe even get more work done.
These places have names like Co-Optim in Deer Park, Suite Spotte in La Grange, Hub 83 in South Barrington, 25N Co-working in Geneva and the Elgin Technology Center. The big daddy of all is Regus, a Luxembourg-based chain that has 20 Chicago locations, mostly downtown, and two dozen more in the suburbs, from Lake Forest to Orland Park. (WeWork, which has six sites in downtown Chicago, isn’t among the suburban hosts.)
Still, shared workplaces are fewer and farther between beyond the city limits. Real estate services firm Newmark Grubb Knight Frank estimates in a recent study that there were 50 co-working facilities occupying 1.3 million square feet in downtown Chicago in 2016. By next year, the study forecasts, their ranks will increase to 86 encompassing 2 million square feet. In suburban Chicago, roughly 45 co-working facilities lease close to 400,000 square feet today, but more are on the way.
“Until now this has been mostly an urban phenomenon,” says Jamie Russo, executive director of the Global Workspace Association in Palo Alto, Calif. “But it’s becoming clear that co-working represents the future of work in the suburbs, too.” She estimates there are 14,000 co-working facilities in the U.S. currently and projects that total will almost double to 26,000 by 2020.
The early thinking was that suburban co-working would appeal mostly to housewives moonlighting part time in internet sales hungry to get out of the house. But it hasn’t turned out that way.
Adil Mohammed, a bankruptcy and immigration attorney, has taken a small office in the Elgin Technology Center and utilizes a Regus office in the Loop on days when he’s meeting clients downtown. He pays $550 a month for his Elgin space. “A decent office would cost me $900 a month, and that wouldn’t include utilities and the fast high-speed internet service I now have,” says Mohammed, 42. “I’m constantly on the road driving to meet with clients all over. So co-working is perfect for a mobile guy like me.”
Neil Morgan, 50, owns Cobalt Solutions, which provides cloud-based human resources services and is based at Co-Optim in Deer Park. He has seven employees, most spread around other co-working spaces. “Co-Optim gives me great flexibility to expand or contract my business without worrying about leasing real estate long term,” he says. “I’ve tried working from home, but there is always the laundry to be done or the dog to be let out. You don’t have those distractions in co-working space.”
RESOURCE FOR COMPANIES
Operators are encouraged. Mara Hauser, 56, an interior designer, started 25N in Geneva in 2014 with 10,000 square feet in a vacant bank building. In August she took an additional 5,000 square feet and now counts a roster of 200 tenants, up from 20 in her first year. She opened a co-working branch in 12,600 square feet in a former hotel in Arlington Heights and is expanding there by 4,000 feet soon. She’s got plans for a space in suburban Dallas and another in Orlando, Fla.
“We’ve become an important resource for companies looking to staff month to month who don’t want to worry about arranging for copy machines and Wi-Fi and furnishings. We have all that for them here,” Hauser says. She has local restaurants provide lunches, and she hosts happy hours and breakfasts for her tenants. She has a fitness studio and telephone rooms and meeting rooms for tenants, too. Prices range from $35 for a day pass to $365 a month and more for private offices.
Rick Cavenaugh, president of Stoneleigh in Barrington, which owns and develops office and apartment buildings around the suburbs, is a co-developer with Hauser in both Arlington Heights and Dallas. He thinks more landlords will catch on eventually. “The co-working crowd makes a building seem more vital and alive,” he says. “You won’t get contracts with companies like IBM, but you will bring in a nice mix of small and medium-sized businesses.”
Many of the tenants are software specialists. Forty-year-old Brian Kothe, who keeps a desk at 25N in Geneva, a few blocks from his home, is a programmer who writes computer code all day long for Sentric, a payroll and benefits processing company in Pittsburgh. His company initially asked him to work from a home office but eventually agreed to pay for his co-working desk. “Hey, it gets lonely at home,” Kothe says. “I prefer to be around other people. If I weren’t here, I’d be at Starbucks.”
He could have Minglin’s old spot.