WeWork opening in Uptown
By Editor Crain’s Chicago
The Chicago developer turning Uptown's landmark Bridgeview Bank building into apartments has enlisted WeWork to operate co-working space on the property's lower floors, the shared-office giant's first location on Chicago's North Side. In a rare deal by WeWork in a residential property, the New York-based company will run a 25,000-square-foot, two-story co-working space in the grand hall of the 12-story building at 4753 N. Broadway, which is being transformed by Chicago-based developer Cedar Street into 176 apartments. WeWork is scheduled to open the space this fall, marking the first time it has partnered with a residential developer to offer co-working as an amenity to people who will live there. The deal highlights the evolving role co-working providers are playing in commercial real estate with more people working remotely. Companies struggling to figure out their office needs in the wake of the COVID-19 pandemic have driven up demand for space offered by WeWork and its competitors, which can be leased by the month.
More office landlords are incorporating co-working into their buildings to help attract new users and offer a flexible office space perk to existing ones. Cedar Street and WeWork are betting co-working will add value to apartments, too. "People want greater flexibility in where, when and how they work," WeWork Chief Operating Officer Melinda Holland said in a statement announcing the Cedar Street partnership. "As many workers desire the in-person collaboration and connection that the office affords, they also want the option of an office environment closer to home—resulting in increased demand for flex space outside of downtown." WeWork's Bridgeview Bank building location will be its 12th in Chicago and its third new local space to open this year, following the January debut of offices at 448 N. LaSalle Drive in River North and a location in May at 167 N. Green St. in the Fulton Market District.
The Uptown space, built out among ornate windows and recommissioned bank teller spaces in the 97-year-old building, will include 60 private offices with a total of 176 desks, as well as private phone booth offices and kitchen spaces. Some space will be dedicated for members of WeWork's All Access program, which offers monthly subscriptions and access to hundreds of WeWork locations globally. The Uptown location also marks WeWork's first management agreement with a landlord in Chicago, a common deal structure today, but a departure from the company's previous strategy of leasing space directly from landlords and then subleasing it to co-working users. Under management agreements, a co-working provider doesn't sign a traditional arms-length lease, but instead manages co-working space and shares revenue with landlords, thereby sharing the risk that comes with operating office space whose users don't have to make long-term commitments.
Cedar Street said in the statement that the Uptown partnership also "opens up the possibility for future WeWork-managed locations across the (Cedar Street) portfolio where there is demand." Cedar Street, which has been one of the busiest apartment developers in the city, began work last year on the $58 million Bridgeview Bank redevelopment after landing $44 million in construction financing for the project. In addition to apartments on floors five through 12 and the WeWork space, the revamped property will include 13,500 square feet of retail space and 19,000 square feet of traditional office space. A spokeswoman for the firm said Cedar Street spent much of the past year restoring the lower floors of the building and work is now underway on the apartments, which are due to be completed by mid-2023.