Flexible Space Utilization – An Innovators Perspective

Written by: Melanie Jones

2021 is finally here. One of my highlights from 2020 was making new connections. As many, myself included, tried to make sense of working from home and understand the changing landscape, I was grateful for the many new friends and innovators I met – and am still meeting!

I decided to start asking these leaders, innovators, and thought leaders a few questions. Because of the interest level in their answers and perspectives,  we were able to transform these “interviews and conversations” into CORT Workplace Talks, a place to learn from some of the best in the business on new trends, upcoming products, ideas, and advice.  Take a look!

So nothing like kicking things off in 2021 with Sam Rosen, a fantastic guy who has an unshakable vision and a team to back it up.

MJ: Sam, we first met online earlier this year during the Real Innovation Academy Future-Proof the Office course with Dror Poleg and Antony Slumbers. Such a unique opportunity to join with commercial real estate innovators from around the globe!

Then I had the privilege of meeting you at your Art/Work Cowork space in Chicago a few weeks ago. Thanks for sharing some insights here!

SR: I’m flattered to get to meet you and chat about some of my favorite topics. By the way, how great was that class?!

MJ: The class was outstanding, and anyone interested in some powerful views of what’s ahead in commercial real estate should definitely participate!  Anyway, I love the way you describe the space we met in; Art/Work!

An integrated collaboration between art, technology, work, and life, Art/Work provides both the functional (automated twenty-four-hour access to desks, meeting rooms, and offices) and the creative (evolving artist in-residency curation + programming, thoughtful design, and conversation).

Art/Work is a test kitchen of sorts for you. What has your journey been like as a leading contributor in the coworking movement?

SR: The first Coworking space I ever visited was around 2008. At that time, there were about 300 “coworking” spaces in the entire world. This particular space was in Brooklyn and aptly named “The Change You Want To See.”

Our experiences discovering that space ultimately encouraged us to open The Coop, the first coworking operator in Chicago. My personal discovery of coworking has fundamentally changed the trajectory and focus of my life and work.

MJ: I’d love to know more about why the coworking model excited you enough to change your career path a bit. Why do you believe in it, and how do you think it will evolve?

SR: I’ve always felt like a bit of an outsider to the traditional world of finance and commercial real estate. The first time I had to sign a lease for our business, it represented more than a half a million-dollar, five year commitment. I was in my early 20’s, and our business was just getting started. The idea of a little company like mine having to make such a big commitment and make such a big bet on where we were going to be five years from today never made any sense. We were still grasping, at that stage, to figure out where we were going to be five months from now, let alone five years. We were lucky enough to have a great landlord here in Chicago that didn’t make us personally guarantee the lease, but if he did, I’m not sure we ever would have committed to it in the first place.

That model never made any sense to me. Does it make sense to you? I’m a millennial who has grown up during this revolution of seeing huge industries like media, transportation, and food being disrupted by service providers who break the old paradigm of doing things into more efficient, smarter, and ultimately better ways of consuming things.

As our friend Dror Poleg so eloquently put it, “Commercial Real Estate is an ideal candidate for disruption. It involves trillions of dollars in assets, it is highly fragmented, and it is rich with inefficiencies and untapped value, so it always seemed like a massive and meaningful pursuit”.

Upon first blush with coworking, it became clear that there was a much better solution out there, and I’ve been fascinated with figuring out what that looks like ever since. More than a dozen years later, it’s pretty incredible to see the world change to accept distributed work and the world of coworking as a fundamental part of the future. Our experience opening our own little coworking space in Chicago’s West Town has brought me full circle.

MJ: Sam, I love your answer above.  Not only because it makes total sense, and I agree 100%, but also because it supports our team’s mission of providing commercial real estate and our Enterprise clients with the flexibility needed to support change and many unknowns.

When my colleague Greg Copeland and I visited with you, you spoke about the importance of technology and automation as a tool supporting the pivoting nature of space. What trends do you see in space utilization for employees and businesses alike?

SR: We believe that the fundamental paradigm of how employees use traditional office space is shifting as we speak. As companies have learned over this last year, their team doesn’t always need to be in the office to get their work done. The way organizations manage and operate their physical real estate needs to evolve to keep up. As the old adage goes, “what can be measured can be managed.”

As employees adopt these new spaces, we’re seeing a proliferation of technology and tools to allow companies and employees to gain better insight into what types of spaces help them thrive. We are currently learning about what style and type of space work best for me might not work best for you and our other colleagues. As we can better quantify which environments make each of us productive and happy, we can make significant changes to optimize our offices (and probably save a bunch of money, too!).

MJ:  Would you be willing to elaborate on the trends we can expect to see from coworking operators in 2021?  Do you think demand will drive more updated amenities like better air filtration systems, offering optimization sensors, or even just a change in design?

SR: Data, Data, Data. I think sensors are a big part of the commercial real estate industry’s future and an essential part of individuals, companies, and landlords truly understanding the future of the office and workplace mobility.  We already see an intense focus around health, wellness, and safety will become a mainstay in the office as we began to reenter and rethink the office.

The first (and giant) wave of coworking and flexible workspace adoption that led us to today came from individuals. Irrespective of if they work alone or for small and large companies, the growth we’ve seen to-date in coworking has mainly been driven by the distributed individuals who have been early adopters and advocate flexible workspace. In this phase, we’ve gone from 1 to over 30,000 operators globally.

But, I believe the next (and much larger) phase of coworking will be coming from the enterprises and mid-large companies. For the first time, companies are seriously considering allowing their employees to work permanently from home or out of the office. This change will bring millions of new faces and personalities into flexible workspaces all over the world. Suppose I were an operator planning to grow a lot this decade. In that case, I’d be laser-focused on how I will prepare for and capitalize on this trend of corporate America adopting coworking over the next couple of years.

MJ: Great segway here. Let us talk about Deskpass! Obviously, I am a huge fan and feel like the future is very bright for your team and even better for users!

Your website promotes Deskpass as Thousands of workspaces your team will love. Unlimited flexibility. No commitments. Pay as you go. I know there is so much more to this platform and the service it provides members.

Would you describe why Deskpass was developed and the problems it solves?

SR: When most folks think about coworking, the first companies they think of or have had any experience with is WeWork or Regus. But that’s just the tip of the iceberg. If you look at a US map, there are about 1000 total WeWork & Regus locations, but another 4,000 other fantastic operators across the country. Those operators often provide the same fit and finish level but tend to give a much more local, personal, and community-oriented environment. Because most of these spaces are independent, they represent spaces not just in significant metropolitan areas but fantastic operators of workspaces in the suburbs, rural communities, and the types of neighborhoods that most of us live in.

What Deskpass does, is we work with all of those brilliant space operators all over the country and make them all accessible through one platform, one application, and clear and straightforward pricing.

The teams and employees on Deskpass get the best of both worlds, the best locations close to home, and world-class technology that helps make the experience of booking and checking into space flawless and make it easy for the employers to stay on top of it all.

MJ: Many leaders charged with right-sizing the workplace’s needs are working hard to understand how to best incorporate flexible space into the portfolio to better support an evolving workforce.

As we move forward, the conversations and explorations seem to focus on various options: Work From Home, Work From Near Home, Hub/Spoke model, different employee scheduling concepts, and definitely a combination of all.

I believe it will take some time for organizations to figure out the right recipe related to space needs. Deskpass is one tool that can help by providing usage data back to Enterprise subscribers, right?

SR: Totally, that’s what we’re focused on right now. Historically, commercial real estate is one of the biggest and most significant investments for a company. Businesses have to make expensive long-term bets for five+ years and hope that their needs continue to match these significant commitments that they’ve made. With the advent of coworking and flexible workspace options, many shorter-term “flexible” solutions have come to help solve this. But, all of these spaces are still occupancy-based, meaning you’re still paying for the space you think you need irrespective of whether you use it.

We believe the future of real estate is a blend between less expensive long-term, flexible space and much more on-demand space that you pay for only as you use. That’s what we’ve built!

Our platform allows you to painlessly add and manage your entire team, instantly offering them thousands of offices, desks, and meeting rooms to book and utilize only when they need it. So, instead of having a desk for everyone on your team, they can work from HQ, home, or a third space. If they need a private phone booth, a conference room, or an office for some heads-down work, it’s all available when you need it, and if they don’t need one, you’re not paying for one.

MJ: CORT has a sensor technology platform called 4Site. We are working to help our clients solve these problems:

  • Is this space working for my workforce now?
  • What type of space is needed for what comes next?
  • Should I stay, or should I go when my lease is up for renewal?

These are indeed very relevant questions that useful data can help answer. Why do you think sensor technology is so important, and how will this type of data help your mission?

SR: The lynchpin that’s going to create broad adoption of flexible workspace is the data. Flexible workspace is so new to most organizations, and they don’t have a good pulse on how they are using their existing space, let alone if they offer different options how their workforce will adopt it. So, I think most organizations will need to have precise definitive data before they confidently leap into modern, flexible office strategies.

Besides knowing when folks are in their seats, there are all sorts of other environmental data that we’re interested in understanding. Soon we’ll not just know what, but better understand how things like volume, lighting, air quality, and so much more affect your team’s work performance.

MJ: You are a fan of CORT’s Furniture-as-a-Service™ model. FaaS is about access to furniture instead of ownership, a subscription-like approach to furniture, really. We are busy supporting landlords and CRE teams with options to create flexible space without being in the furniture business. I hope that in the near future, we will be able to better support coworking organizations.

Do you think that coworking operators will be looking to minimize capital expenditure and retain the flexibility that a new type of user might demand?

SR: One of the most significant pieces of advice I give folks launching new coworking spaces is to make sure that they build flexibility to adapt, change, and optimize their physical space. As you begin to build, you make a ton of assumptions about who will work in your room, how team members will prefer to use it, and it’s critical that you continually use that data to inform your design. It’s a challenging proposition, as the traditional office furniture paradigm is expensive and semi-permanent.

While every coworking operator has different philosophies around operating and capital expenses, the ability to take what is traditionally an expensive fixed cost and transition to a variable cost is a big deal. Especially as you begin to build a coworking space and brand, the ability to scale the furniture up and down as you better understand the market is critical.

While every coworking operator has different philosophies around operating and capital expenses, the ability to take what is traditionally an expensive fixed cost and transition to a variable cost is a big deal. Especially as you begin to build a coworking space and brand, the ability to scale the furniture up and down as you better understand the market is critical. As you get to know your customers, their demands, those with the agility to make changes and adapt, ultimately succeed. That isn’t easy if you’re still paying off your initial obsolete investment in furniture.

MJ: We have a common interest in sustainability. CORT’s business model is built around a “circular economy.” We purchase furniture and provide them to various clients several times through a lease agreement. Once the furniture is no longer suitable for a client environment, we sell merchandise to the public in one of our facilities.

As busy as you are, why do you dedicate time as a board member for a cause like this?

SR: I don’t think we always think deeply about what happens to something when we’re done with it. That is especially true with furniture and home/office deconstruction. When you remodel your home or your office, most of what was there ends up in a landfill, and in a city like Chicago, we don’t have any more landfill space available, so we ship it to our neighbors. Many of these materials that end up in the trash are perfectly good. In fact, someone out there is probably in good need of whatever you’re tossing out.

A few years ago, I was honored to join the Rebuilding Exchange (RX) board here in Chicago. RX’s mission is to create a market for reclaimed building materials. We accomplish this by diverting materials from landfills and making them accessible for reuse through our retail warehouse, promoting sustainable deconstruction practices. We also do this by providing education and job training programs, not just offering materials a second chance but also wonderful folks looking to rejoin the workforce. It’s a brilliant organization. Please consider supporting it!

MJ: Since you live at the intersection of space, technology, design, and entrepreneurism, what advice do you have to others who might benefit from a bit of advice in these unusual times?

SR: I recently read a book titled Digital Minimalism by Cal Newport, which really affected me, and I recommend it. I am one of those kids that grew up just as the internet was beginning to weave its way into our everyday. It’s easy for all of us (old and young) to forget to make the space and time to unplug and take a break from being connected. In a time of ever-increasing connectedness and all of us being very online, it’s as important as ever to unplug, step away from the beepy flashy things and be with those you love. Through thick and thin, I am reminded I always get my most joy from being face-to-face with my friends and family, and it’s never been a more critical time to make time to do that.

MJ:  Sam, I am so grateful our paths collided.  2021 will be a year of continued commercial real estate innovations. You are an exceptional innovator and leader, and no doubt will continue to be out front helping us see a version of space utilization that didn’t exist before. Wow, that’s impressive!

About Sam
Sam Rosen is cofounder and chief executive officer of Deskpass, an industry-leading online membership offering access to hundreds of unique coworking spaces and conference rooms nationwide. A habitual problem solver, Sam first directed his creative energies toward a solution for managing coworking spaces after seeing the challenges firsthand as co-owner/operator of The Coop, Chicago’s first dedicated coworking space. Sam has an established reputation as a successful entrepreneur and a well-respected voice in the design community. Before launching Deskpass, he co-founded the art collaborative The Post Family and One Design Company, a digital branding agency that creates powerful experiences at the intersection of research, communication, design, and technology for some of the biggest brands in the world. He lives in Oak Park, Illinois, with his wife and two fantastic children.

About Melanie
Melanie Jones is responsible for educating, supporting, and building relationships with commercial real estate teams across the US to support CORT’s Furniture-as-a-Service™ model. A mission-driven leader who brings the necessary energy and innovation to support change in the way furniture is utilized in buildings and the workplace.