What began in 2014 as an exploratory concept by Verizon’s real estate team has resulted in the announcement for a groundbreaking partnership with Grind, a well known and respected coworking brand with spaces in NYC and Chicago, IL. 10,000+ square feet of space deemed underutilized at the company’s headquarters located across from One World Trade Center will become a test bed to potentially launch additional locations nationwide. With the evolution of Verizon’s business, the company has found itself decreasing their space requirements drastically so. Sources report that Verizon could be sitting on upwards of 2.4 M square feet of this underutilized space in their portfolio, a mix of both owned and leased properties.
This announcement wraps up an over year and a half process where Verizon executives dedicated resources to study, discover and engage the coworking movement. Tours took place in multiple markets up and down the Northeast Corridor, with conversations had about nationwide applications. What’s interesting about this announcement is that sources originally shared that after extensive tours and meetings, Verizon decided to peruse any future space re-positioning as an internal project. Why now the change in plan? This very well could be a peek behind the curtain for what may be the “New Normal” for coworking space owners and management professionals. Grind is known for it’s premium membership based coworking communities and mission to shape the future of work with a unique culture and aesthetic. Rather than attempt to design their own coworking brand, most easily compared to the Capital One 360 Cafes, Verizon is minimizing their risk by partnering with a well known brand to easily and efficiently re position real estate assets.
This partnership model, while a solution for large real estate portfolios also offers smaller operators the opportunity to expand a unique or well performing brand/concept that might not be able to scale in a traditional lease environment. With building owners opening up to operator models, we might be witnessing a great new chapter in the growth of the coworking market. Models that aren’t just private offices may have the breathing room and lifeline to take their time in growing. Benjamin Dyett, co-founder of Grind shared his team was “excited to form this collaborative partnership…(combining their) culture of innovation with Verizon’s technology and real estate expertise (to) deliver a powerful workplace experience.” For those who follow Dyett, earlier this year he hosted a LEXC webinar on why he’d “Never Sign Another Traditional Lease Again”, now we know why!
While Grind has been selected as the operator of the space, Verizon has brought in leading architecture and design firm Gensler to create an “environment that inspires knowledge sharing and collaboration”. The project’s target audience of start-ups and entrepreneurs will be beneficiaries of mentor programs provided by Verizon Ventures, the venture capital arm of the company. The space, located at 140 West Street in lower Manhattan will include open workspace, team rooms, conference rooms and meeting space with a capacity of around 120 people a day and is set to be operational in early 2016. Eyes will certainly be following developments on this partnership to see if a real transition from traditional leasing is possible and if the owner/operator model proves profitable for both parties.