How WeWork Capitalizes On Aging Architecture

The coworking company is remaking historic and aging buildings across America.

“They don’t build ’em like they used to.” It’s an oft-repeated phrase by those who wax nostalgic. But in the case of the Corbin Building–an office building architect Francis H. Kimball designed in 1888–the saying holds true. The distinguished Renaissance-Revival structure is covered in terra-cotta tile embellished with floral patterns. Inside, its monumental staircase with marble steps and an ornate bronze banister ushers visitors up its nine stories. Original wainscoting and cast-iron fireplaces are found throughout the space.

It’s architectural details like these that convinced WeWork to open a location in the 128-year-old space, which welcomed its first members last week. “We like buildings with character,” says Dave Fano, a trained architect who is now WeWork’s chief product officer. “And we like to bring life to older buildings.” The Corbin Building is listed on the National Register of Historic Places and is a designated New York City Landmark. It’s also one of the 14 landmark locations WeWork occupies across New York, Los Angeles, Chicago, Portland, Boston, Detroit, and Washington, D.C. Five are listed on the National Register of Historic Places, eight are located in historic districts, and one is registered with a state historic preservation office.

Over the years, WeWork has quietly evolved into a champion of adaptive reuse and historic preservation through its work with so-called “Class B” buildings–a designation for commercial buildings that are typically older and less expensive to rent than the nicest buildings on the market. Over 50% of WeWork’s spaces are in Class B structures. But while a love of old buildings influenced the company’s foray into landmarked real estate, it was its marketing strategy and business plan that really pushed WeWork into this role. These buildings appeal to many of its customers’ design sensibilities, and they allow WeWork to efficiently and economically keep up with demand for new spaces. By renovating Class B buildings into chic, amenity-filled workspaces, the company is generating real estate value through design.

Inside WeWork Fulton Center

The Corbin Building was almost demolished when the MTA set out to build Fulton Center, a transit hub in Lower Manhattan, but was spared at the behest of preservationists and community groups that lobbied to preserve the building. The MTA, which owns the Corbin Building, decided to integrate it with the train station instead of tearing it down.

WeWork’s space is split between the Corbin Building and the brand-new Fulton Center; the architects cut a hole in the side of each building to connect the two. Because of the space’s location near 11 subway lines, WeWork predicts that many of the members using the space will be on the go, so it integrated a larger concentration of hot desks into the plan. The desks orbit the transit center’s oculus and have internal views down into the center and out toward the city. (WeWork’s main communal space is actually behind the monumental Sky Reflector Net, an artwork by James Carpenter Design Associates, Grimshaw Architects, and Arup that adorns the oculus.) The bar and food area is also located in the Fulton Center half of the space, as are a number of enclosed bookable conference rooms, phone booths for private calls, break-out spaces, and gender-neutral bathrooms.

The private offices are all located in the Corbin Building, which posed its own challenges when it came to renovating. WeWork made an opening in the wall between the new and old buildings, and had to retrofit the heating, cooling, electrical, safety, and internet systems throughout both halves of the office, which posed a technical challenge–since there was a six-inch change in the floor levels between the two buildings. “Everything, even how we could hang a duct, had to be approved by the MTA,” Fano says. WeWork couldn’t make structural changes, but it could add glass walls to partition the offices. On some levels, it had to contend with long hallways clad in sheetrock protected by landmark laws. But for the most part, the company viewed the original architectural detail as an extra layer to the design story that it couldn’t have replicated if it tried. “The best design comes from constraints,” Fano says. “When you have a blank canvas, you have a higher chance of messing it up. But when you have the constraints, they create all these design pressures that you might not have thought to apply yourself.”

WeWork has eight other landmarked buildings in New York City, including spaces in SoHo’s Cast Iron district, the Gansevoort Market Historic District in the Meatpacking District, West Chelsea, and adjacent to Grand Central Station. It maintains spaces in landmarked buildings from coast to coast, too. So why does it go to the trouble of picking spaces that are so heavily regulated and have so many constraints?

Fulton Center, New York, New York

The Business Savvy Behind Aging Buildings

Truly turn-key office space is rare; tenants often must renovate spaces to suit their needs. Older buildings are frequently a warren of rooms, which doesn’t jibe with the open-plan spaces that are so popular today. This poses a challenge for landlords who are leasing these Class B buildings, as well as for renters who must renovate them. Not so for WeWork–it often makes financial and design sense for the company to target these types of spaces.

WeWork’s preference for working with what’s already there, architecturally, can sweeten the deal for landlords and help WeWork secure a better lease agreement. “Sometimes it makes financial sense for them,” he says. “A big technology tenant would ask to wipe it out and give them a clean white box. We say, ‘no, no, we like it as it is–we’ll build on top of it.’ We try to get that [expense] back in tenant improvement money they would have spent anyways. We can put it into other things. Oftentimes, landlords manage build-outs for their tenants and we do it all ourselves, so we’re a bit less of a headache.”

How WeWork negotiates with landlords varies on a case-by-case basis, and a lot of the details depend on the buildings and what state they are in when WeWork signs on. Discussions begin early on and can involve negotiating how tenant-improvement money is spent. For WeWork, it often involves updating the HVAC, electrical systems, bathrooms, and replacing windows. Since WeWork has the experience and team to complete this type of work–most other tenants competing for space don’t have trained architects on staff–it often becomes mutually beneficial for the landlords to have WeWork complete improvements as they build out the coworking spaces to their specifications.

Fulton Center, New York, New York

While WeWork doesn’t exclusively deal in historic structures, it prefers older sites over Class A spaces. When it seeks out a new location, a number of factors weigh in on the decision. Availability of real estate in a given neighborhood is one; the company needs a certain amount of square footage to make the build financially feasible. Attributes like floor-plate depth, the amount of natural daylight that permeates the space, and character are all important, too. (The Corbin Building happened to be in a great place for public transit, WeWork wanted another downtown location, and the ability to get wide-open space in the Fulton Center made this project possible. The Corbin Building alone wouldn’t have been enough.)

“We try to find the right economics, the right landlord that’s willing to work with us, and the right building that’s got the right bones for our product,” Fano says. “It’s multifaceted. For every one building we’ve opened, we’ve probably looked at 10-15 different sites.”

In a city like New York, there’s only so much developable space and available real estate. The Corbin Building was empty for sometime before WeWork signed on–surely a byproduct of the challenges of working in a landmarked building where architectural changes are so heavily scrutinized. When its restoration was complete, the MTA envisioned a conversion into office space, hotels, or retail in its RFP for developers and long-term master tenants. WeWork wasn’t involved at this point, but Fano argues that offices were the most logical use, since the building doesn’t have the plumbing infrastructure for a hotel. Since WeWork has experience with landmarked buildings, values the historic detail, and designs a variety of different programmatic spaces into each coworking location, the constraints weren’t as limiting–or intimidating–as they may be for another tenant.

“We don’t do any ground-up development on our own and that’s because we think the existing building stock is interesting and has a narrative,” Fano says. “We like the idea of building on top of that versus trying to craft our own narrative from scratch. We just like the charm, and we like when the building has a story. That’s something we look for in our real estate selection. That’s not to say we don’t look at Class A office towers–we do that too–but we definitely try our best to have our first building in a market be a building that has character, that has history.” Since WeWork hasn’t completed a ground-up build, it can’t compare the exact cost, but it’s safe to assume that building an entirely new structure from scratch is significantly more expensive and time-consuming than a renovation.

Class A buildings are typically modern structures (or really well-maintained older buildings, like Rockefeller Center) with new mechanical, heating, and cooling systems and have amenities like doormen, key card entry, and transit accessibility. They command the highest rents. Class B buildings tend to be cheaper to rent and aren’t as nicely finished. They’re also more desirable for the type of member WeWork wants to attract. “We tend to go to Class B buildings because they have more character and because our members don’t really care to be in a Class A building,” Fano says. “The world’s changing in that sense. People want to go to buildings with character. Our real estate guys call it the TAMI market–technology, advertising, marketing, and information. The Twitters and Buzzfeeds of the world don’t really care to have Class A space.”

Though Class B space has long been viewed as less than ideal for offices, the tide has started to turn as these spaces have become desirable for startups in high-growth industries. A 2014 story in the Real Deal, a real estate blog, predicted that all Class B and C office space would be fully occupied by 2018. Boston’s real estate market has also seen a shift in the type of office space startups wanted: character-filled older offices as opposed to sterile new builds.

Fulton Center, New York, New York

Becoming A Good Neighbor

Tech companies often get a bad rap for the spatial implications of development in a city–like how intrusive a new building is physically and how new development raises rents. Adaptive reuse shows how these projects can potentially be a force for good–at least for architecture. Not all old buildings are worth saving, but that there’s a viable market for tenants specifically seeking these older structures as opposed to new builds might make a compelling argument for cities in which preservationists and community groups hold a lot of sway as they do in New York, and where the drive to demolish and build anew is threatening historic building stock. However, this doesn’t necessarily lessen the impact of higher real estate prices.

Developing older buildings was about expediency and efficiency for WeWork: It’s faster and less expensive to renovate than do ground-up construction. And by doing adaptive reuse projects, WeWork gets to be the architectural good guy, infusing an old building with contemporary uses. Yet it’s a careful balance. Depending on where and when it opens up shop, the company could easily be read as a gentrifying force.

“A ground-up development is probably easier, but the eyeballs on it are so different,” Fano says. “Either there was something there and you’re tearing it down and that’s going to upset people. Or there was nothing there and now you’re blocking views and that tends to upset people. And everyone’s going to have aesthetic opinions on what it looks like and guaranteed not everyone’s going to like it. When you do ground-up development, you expose yourself to so much more. Every time a building goes up in New York, you have community boards coming in and saying you don’t need it, that’s going to bring in too many people. We don’t have to deal with any of those things. The building is here, it was filled with people, and, if anything, it might have been torn down. We come in and give life to them. For the most part, I think we just fly under the radar.”

Renovating historic buildings has made business sense for WeWork, but Fano doesn’t see it as a part of a crusade on behalf of the company to be known as the preservationists. “We try to do what we think is right and not attach it to a thing, like ‘preservation is our thing’ or ‘sustainability is our thing,’” he says. “We just try to do the right thing without latching onto it in an explicit way.”

[All Photos: courtesy WeWork]

About the author

Diana Budds is a New York–based writer covering design and the built environment.

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