Rabih Helou remembers when Beauty Shoppe, the coworking space he co-owns in Pittsburgh’s East Liberty neighborhood, was the only one in town.
“If you Googled ‘coworking in Pittsburgh’ five years ago, we were the only thing that came up,” Helou said. “Now we’re not even on the first page [of search results]. This is an industry that has become super competitive.”
While Pittsburgh isn’t in the same league as New York or Boston when it comes to coworking space, the arrival of coworking giant Regus in the area is a signal that the region is not that far behind the trend.
Regus’ Spaces at Bakery Square opens March 6, with a 25,000 square-foot hub that includes a 4,500 square-foot business club, 160 private offices and three meeting rooms. Michael son and so says the company plans to host networking events there to encourage tenants to connect with each other.
“We’ve been doing ‘coworking’ since the 1980s,” said Regus vice president of network relations Michael Berreta. “What really differentiates us from other companies is the size of our network, and our relationships with our customers, whether that’s an entrepreneur or a young millennial, or a Google or an Amazon.” Regus has 3,000 locations in 900 cities worldwide.
More freelance work expected
The growth of coworking spaces preceded the so-called 1099 economy, but the two sectors dovetail nicely with one another. According to the Bureau of Labor Statistics, the number of freelance or independent contractors will increase to 40 percent of the American workforce by the year 2020.
“I think coworking has evolved to serve two kinds of workers,” Helou said. One is the image that most people associate with coworking, he says: a graphic designer, social media consultant or other freelancer who would hunker down in a coffee shop with a laptop. “These are the people who said ‘let’s rent a space together,’ because none of them could afford a space on their own.”
But some coworking spaces now provide incubator space as well, and work to foster a collaborative environment among members. Beauty Shoppe has recently moved into that arena, expanding to manage the coworking needs of startup incubator Ascender, which is right around the corner from their East Liberty location. And Beauty Shoppe plans to open another coworking space later this year in Cleveland.
“For us it’s about being a resource to the community, not just about giving people a place to plug in,” Helou said.
Open since 2011, Beauty Shoppe is a veteran in Pittsburgh’s coworking arena. But it’s not the only player in the field by any stretch of the imagination. WorkHard in Allentown, housed in a former hardware store has operated as a community coworking space since 2013, and has a podcasting company on its lower level. Alloy26 on the North Side, housed in the former Woolworth building at Nova Place, has 50,000 square feet and has already attracted international companies, even though it’s been open less than a year. And Coterie, designed for professional women, opened in the top two floors of the Frick Building, Downtown, in January.
A 2016 report by real estate services firm JLL found that coworking is still only a fraction of commercial real estate, making up 0.7 percent of the total U.S. office market. But the report found that demand for coworking space is “unprecedented.”
The cities with the most coworking space are not surprising: Atlanta, Boston, Chicago, Los Angeles and New York. Demand is strong in Washington, D.C., Denver and Philadelphia as well, according to JLL.
Spaces Bakery Square will be Regus’ ninth Spaces-branded location in North America, and is part of an expansion that will include nearly a dozen additional sites just this year. A membership costs $239 a month, with office rentals starting at $435 per month. That’s at the high end of the scale; Beauty Shoppe starts at $100 per month, with a discount for students.
Pittsburgh comes in at about 40th on the JLL coworking spaces list. But Helou says the fact that a giant like Regus has moved into the area is a sign of the Steel City’s appeal.
“Regus entering into the Pittsburgh market is a clear indication that the market for coworking here is bigger than presumed,” he said