When Christopher Dossman and his wife, Yao Li, were looking for an apartment in New York last year, they put together the usual list of preferences: washer/dryer, proximity to a supermarket, access to the subway. But a top priority for them was a work-from-home space.
In April, the couple moved into the Willoughby, a 34-story tower in downtown Brooklyn, paying $4,300 a month for a bedroom. The building is unfinished, but they chose it because it offered a critical amenity: a 22nd floor co-working space with semi-private benches and a meeting room overlooking Fort Greene Park.
“I’m there every day,” says Mr. Dossman, an entrepreneur who founded several tech start-ups. “There are days when I don’t leave the building at all.”
As corporate America adapts to employees’ requests for flexible schedules, Mr. Dossman is part of a growing number of employees who want to work remotely, but not necessarily from their living room couch or kitchen table.
The pandemic forced an exodus of workers from offices in 2020. Even as workplaces reopen, 59 percent of employees are still working remotely, according to a survey published by the Pew Research Center earlier this year. Of those telecommuters, 78 percent say they want to continue doing this after the pandemic, up from 64 percent two years earlier.
Developers across the country are doing what they can to make remote work easier to lure potential tenants, sparking a amenities war as luxury rental buildings and apartments dangle must-have conveniences like private offices, meeting rooms, task lighting, wall-mounted monitors, podcasting booths and fast internet.
“It’s something you have to do today; it’s an amenity, like a swimming pool,” said Ric Campo, the chief executive and chairman of Camden Property Trust, which included a workspace called the Hub in the common area of Camden Harbor View, a residential area in Long Beach, California.
For most buildings, the cost of the workspaces is included in the rent, but some landlords charge a fee to reserve a space for a large meeting or an extended period of time. Co-working companies like Industrious and WeWork are starting to take notice, hoping not to be chased out of what could become a lucrative market.
Developers have been adding space to apartments for years as architects design bedrooms and alcoves to accommodate desks and other work equipment, a trend that has only accelerated during the pandemic. The size of the average new apartment has increased by 9.6 percent since the start of the pandemic compared to homes completed in the 10 years before the pandemic, said Matt Vance, senior economist at real estate firm CBRE. The increase is equivalent to an additional 90 square feet, or the size of a bedroom or workspace.
He added that the demand for workspaces has also expanded to communal areas. “Over the past ten years, we’ve had cyber cafes with booths and coffee machines, shared spaces in apartment buildings,” he said.
But as Americans settle into a hybrid work model, they are seeking more professional spaces where they can have a private Zoom conversation or gather clients for a presentation without going to the office.
“People have high expectations,” said John G. Weigel, senior development executive at DivcoWest, a real estate services company. “We’re incentivized to make sure this is as robust as possible.”
DivcoWest’s portfolio includes Park 151, a 20-story multi-family complex in Cambridge, Massachusetts, opening this fall with 468 apartments and a community space with five dedicated work-from-home and meeting rooms.
“It’s a significant part of our amenity package and it’s gotten bigger,” said Mr. Weigel. “Now that the feasibility of working from home has been proven, we will see more of this.”
Other developers switch halfway through construction. At Brooklyn Crossing in Prospect Heights, Thomas Brodsky, a partner at the family-owned Brodsky Organization, scrapped plans for an open lounge and added semi-private booths and “phone booths” to the building’s co-working space, slated to open in August. .
And developer Macklowe Properties bolstered the technology at One Wall Street, a downtown Manhattan condominium, by adding microphones and cameras for virtual meetings and podcasting booths to its co-working space, now called One Works by One Wall Street, said Richard Dubrow, the company’s director of marketing.
The increased interest in work-from-home spaces comes as companies struggle with their ever-shrinking office footprint. Metropolitan areas with a higher percentage of home-based workers had higher office vacancy rates from late 2019 to late 2021, according to a report released in May by Moody’s Analytics.
Real estate watchers say the concept has legs and, if managed properly, can be successful in the long run.
“There is such strong multi-family demand for this space that we think it’s going to be a persistent trend,” said CBRE’s Mr Vance.
The model could be expanded in higher-density areas to include the surrounding community, said Thomas LaSalvia, senior economist at Moody’s Analytics. “It doesn’t have to be the residents of that apartment building who use that space; they could be neighbours,” he said.
That larger vision has sparked the interest of Industrious, a workplace provider with 150 locations in 65 cities around the world. “There are developers starting to want to create a complex that serves the tenants and the outside world,” said Jamie Hodari, the company’s chief executive and co-founder.
He pointed to Monrovia, California, where AvalonBay Communities, a real estate investment trust with a stake in 296 apartment communities, rents private work spaces on the ground floor of its apartment complex to residents and the general public under a brand called Second Space work suites.
Mr Hodari added that a number of large apartment owners had contacted his company about a partnership. “We’re pretty close to an announcement with one of them,” he said.
Tenants have various reasons for looking for a ‘third space’, a communal space that is distinct from home and office. Their home office may be too small or too distracted or not professional enough for an important virtual call with clients.
And some, like Mr. Dossman, may have a spouse who also wants to work from home.
“Most of my job is talking to other people,” he said. “It wouldn’t work if we called at the same time.”
The added benefit of a work-from-home space has forced some renters to re-evaluate how much space they need in their own apartments.
Amina AlTai, a career and business coach, was drawn to One South First, an upscale building in the Williamsburg neighborhood of Brooklyn, for its work-from-home space, which includes two private meeting rooms and a larger boardroom. She reluctantly took a studio apartment in the building as nothing else was available, but when a one-bedroom apartment opened up, she realized she didn’t need it.
“That experience space is great,” she said. “I use it at least twice a month.”
For Ms. AlTai, the space allowed her to resume in-person meetings, a critical part of her business that was shut down during the pandemic. She’d tried typical co-working spaces, but said the quality wasn’t consistent. At One South First, she pays $100 for a four-hour rental of a private room where she can seat her client in a chair overlooking Domino Park and the East River.
“Sometimes there are experiences that cannot be translated through the screen,” she said.
These spaces can help renters reduce other monthly costs as well, including transportation and dining out. “When I don’t live, I save $100 a month,” said Mr. LaSalvia of Moody’s.
But one of the most overlooked benefits is something an apartment alone can’t offer, something many workers look for after two years of remote work: a social experience. “It creates a more communal atmosphere,” said Mr. Vance.
At the Willoughby, Mr. Dossman and Mrs. Li have gotten to know their neighbors through social events such as happy hour mixers and wine tastings in the work-at-home space. The experience inspired him and a friend to arrange a meeting with other startup founders in New York, saying it would cost $250 an hour to host an event in the building.
“We looked at a few different places for events, and it’s much cheaper than a bar,” he said. “This is a good place to be and it just keeps getting better.”
