Twin Cities coworking spaces come back to life
Coworking offices traditionally cater to individual entrepreneurs and people working for small organizations who don’t need large permanent office spaces.
But as telecommuting during the coronavirus pandemic has changed work habits across Minnesota, the makeup of coworking spaces in Twin Cities has changed. Many traditional customers have returned to these flexible working environments, but they are being joined by a new wave of workers, some of them employed by large companies and free to work from anywhere.
Inasmuch as“I don’t think we’ll ever return to a time when the corporate office was the primary space for teams to collaborate and connect,” said Alex Steinman, co-founder and partner of The Coven, a co-working operator. in the Twin Cities that cater primarily to women. “I think the future is in co-working and we see many companies considering co-working spaces as potential options for their employees.”
This model works for Qumu, a Minneapolis video-as-a-service company with 11 full-time employees in Minneapolis and 114 total. It closed all of its offices in the fall of 2020 and went entirely remote.
But to facilitate ongoing in-person meetings after the pandemic, the company contracted with Fueled Collective in Minneapolis for on-demand space for in-person meetings. Jason Karp, the company’s chief commercial officer, explains that Qumu uses the space about 14 times a month.
“We still consider Minneapolis our home base and believe in providing physical space for in-person collaboration,” Karp said. “It’s about empowering our people to work in the way that works best for everyone.”
Plus, it saves the cost of fixed leases and other real estate expenses, he said, and eliminating commuting gives employees more flexibility.
The Fueled Collective has recently seen a further increase in membership. The space at the Twin Ignition Startup Garage is full. Private office space at Coven’s Minneapolis office on Nicollet Avenue is also at capacity. And while membership levels at the Downtown Minneapolis Finnovation Lab have not returned to pre-pandemic levels, they have steadily increased in 2021.
In 2019, nearly 190,000 people in Minnesota worked from home, according to census data. But the Minnesota Department of Jobs and Economic Development estimates that number was 600,000 in January 2021, as telecommuting became the norm because of the pandemic.
As companies consider return-to-office plans, many are considering hybrid models. Coworking facilities say they are part of the plan for some large companies or workers who want an office.
A July 2020 survey of Minnesota Chamber of Commerce members found that 45% believed the pandemic would make remote work more permanent; 37% said it would lead to making remote work an option.
For some coworking companies, a flexible workspace is ideal for striking a balance. And coworking space memberships can be more cost-effective compared to multi-year leases.
Last fourth quarter, the asking rental price for office space in the Minneapolis market was $27.63 per square foot, according to real estate services firm Cushman & Wakefield.
Meanwhile, monthly subscriptions to Fueled Collective, which operates two coworking spaces in Minneapolis, start at $25 per month. Memberships range from full-time work to one hour per month. People can also rent space in both spaces by the day or even by the hour, said Colleen Moselle, president of Fueled Collective.
The Coven opened its first office in Minneapolis in 2018 and opened a 10,000 square foot location in St. Paul’s Blair Arcade six weeks before the pandemic caused buildings to close on the subway in 2020. Between March and July 2020 , both locations We are closed.
The day after they closed their doors, Steinman and his team created a digital community. During the shutdowns, the virtual hub allowed people to “stay connected” and offered programming around operating its business, she said. This move led to the company doubling its membership over the next four months.
Between its Minneapolis and St. Paul offices and the digital option, the Coven has approximately 1,000 members.
“With the children returning to school – and we serve everyone, but many of our members are women, non-binary and trans people who are caregivers or parents – we have seen a spike in people who want out of their homes,” Steinmann said.
Entrepreneur and tech investor Seth Peter founded Twin Ignition Startup Garage, a coworking space in Minneapolis, in 2017. The 6,000 square foot space opened in December 2019 with a few tenants, but sat empty for most of 2020 due to COVID-19.
In 2021, as people began to gather again at social events such as Twin Cities Startup Week, news of Twin Ignition’s available space spread, helping Peter and his partners sign new tenants.
Now the building is at full capacity with an average of 50 people from various companies using the office daily, Peter said.
“A year ago around this time, people were coming into the office as little as they needed to,” Peter said. “We built confidence with the vaccinations and maybe people were just tired [of staying home]. There’s been a steady buildup of people spending more time with others.”
The members, even if it’s one day a week, “just want to be able to get away from it all here and there and be around like-minded people,” he said.
Coworking spaces have instituted safety rules to keep members safe. For example, the Coven and the Finnovation Lab, for example, both require masks and did so before the city’s mandate. The Coven also requires proof of vaccination.
“I think maybe we’ve seen more people come into our space because we’re taking these extra precautions and people feel safer in our space than in other spaces,” Steinman said.
Finnovation Lab, the 10,000 square foot coworking space atop the Finnegans House building in downtown Minneapolis, has suspended memberships and waived fees in 2020, “thinking we could weather the storm,” said said Connie Rutledge, CEO of space.
“We’ve had people put their memberships on hold, not knowing when they’ll be back with closed offices and kids learning remotely,” she said.
To absorb the loss of membership revenue in 2020, Finnovation received two loans from the federal Paycheck Protection Program and renegotiated terms with the building owner, Rutledge said.
In 2021, indoor building activity and membership rebounded, and while membership hasn’t returned to pre-pandemic levels, it’s a big improvement, Rutledge said. Of the company’s 12 private office suites, nearly all are occupied.
“People need to focus and need a few days a week to come to work so [they’re] not distracted by chores, children, pets or partners,” she said. “I think it will continue. We’ll see more people looking for solutions to revitalize their work lives, because I feel like there’s been quite a bit of burnout with COVID and maybe coworking is a way to shake it up a bit. “