Bill Bennett, CEO of coworking office firm, Expansive, has some advice for his fellow C-suite leaders considering their office space needs: Five- or 10-year plans no longer work.
According to Bennett, most large companies will continue to invest in showcase corporate headquarters, but they will outsource other real estate needs such as satellite offices, creating a need for shorter-term and more flexible office space.
“Corporate America is trying to solve their real estate question and attract and retain talent, and very few firms have shown they can do that outside of their corporate headquarters,” he says. “Once you accept that planning for your non-headquarter locations 10 years out is unrealistic, then you can create a nimble strategy that suits your short-term needs. You’re going to have a much higher likelihood of success if your 10-year plan is a series of one-, two- and three-year plans.”
From large firms planning for their satellite offices to smaller businesses not ready to commit to long-term space, creating a series of short-term plans allows for flexibility to adjust – up or down – and to adjust to changing market and city conditions, he explains.
Solving for X
Like many entrepreneurs, Bennett created a business to solve a problem.
In the late 2000s, Bennett ran a real estate business from his home in the Chicago area. “I found I was very unproductive, and I became disconnected. Fundamentally I lacked connection and belonging,” he recalls.
He spoke to other entrepreneurs and found he was not alone. He figured finding a solution would be easy, but big buildings weren’t interested in his small business, and he didn’t want to sign a long-term lease either. The short-term office suites available at the time did not fit his needs.
“It was expensive and had a solid 1980s vibe, and I just didn’t find it compelling to a mid-career professional,” he admits. He then looked at incubator space, which offered more flexibility and lower cost but, for Bennett, it lacked professionalism and did not have adequate internet speed and security.
He seized the opportunity and spent a couple of years researching coworking spaces in 30 states and several countries, recognizing a shift in what people wanted.
“The large firm taking huge blocks of space was shrinking,” he says. “Most of the job creation in America and the Western world was small- and medium-sized businesses. Even the large businesses that were growing were doing so with satellite offices.”
He saw that the modern professional employee was looking for a highly productive space that was engaging and offered a sense of belonging and community with other professionals. That space would attract and retain talent, Bennett knew.
So began Bennett’s foray into the coworking market, opening his first space in Chicago in 2013. Now he has a more than 350,000 square meters (3.8 million square feet) in 36 U.S. markets and is eyeing international expansion.
Post-pandemic pivots
While Bennett’s enterprise enjoyed healthy growth until 2020, the pandemic changed the market.
He says cities that have struggled with real or perceived safety issues and those that had stricter work-from-home orders during the pandemic have fared worse than other cities. Where restaurants and other businesses that supported busy office buildings closed, demand shifted to the suburbs.
“The ecosystem of a city wins together, and it loses together based upon the ability of that city to provide services, amenities, safety and vibrancy,” Bennett says.
The flex office market picked up in 2023, and Bennett is looking to grow Expansive where the demographic trends are strongest. In the U.S., he says that’s the Southeast and the mid-Atlantic regions, as well as Arizona, Nevada, Texas and Tennessee.
“These are the markets that have a massive, triple tailwind,” he explains. “They have young, highly educated professionals with high incomes moving there, which in turn, attracts employers.”
Canada, the U.K. and Europe are also strong markets for flexible workspace, he notes. “They have better transportation systems and are more used to using them,” he adds. He also points out that they tend to have smaller homes than in the U.S., so the home office is not an option for many employees.
A winning formula
Must-have amenities at coworking spaces include fast, dependable and secure Wi-Fi, secured access, and security, but can also include game rooms, fitness centers, rooftop decks and coffee and tea stations.
“While customers may choose a flexible office space for its location, price and amenities, they stay because of the service, the professional community and network, and the professional development they experience by being part of the community,” Bennett says.
Feeling connected to other professionals was one of the main reasons Bennett moved into this industry. And, it is the No. 1 reason he feels shared office space is so important.
“Individuals lose, and teams win, in the modern world,” Bennett explains. “And teams win because we collaborate. We all have different strengths. Our diversity helps us when we get together to collaborate and build consensus, which drives momentum and engagement. That’s a winning formula. And that winning formula is created in an office more than anywhere else throughout human history. That’s why offices were created, why they expanded and why they still exist today.”
