🔒Coworking spaces evolving into more than just a mainstay of the ‘gig economy’

When Patrick Roche was living in New York City, he needed a place to write. He wanted to get out of his apartment and be around people doing the same thing he was.

He found a place where writers got together to work, though at that time the term “coworking” didn't exist. When he moved to Portland in 2010 he looked for the same thing, but couldn't find it. So he opened his own.

Now Roche's Think Tank Coworking is in a 10,000-square-foot space at 533 Congress St. in Portland, with satellite locations in Yarmouth and Biddeford.

Coworking started as an attractive working environment for the self-employed, remote workers and startups. 

“Virtual connectivity isn't enough for people,” he says. “They need a sense of purpose, and to connect with others who are doing the same type of thing they are.”

Shared space, with amenities

Roche started his business in an upstairs space on Exchange Street. “I wanted a place for creatives to be around other creatives,” he says.

Within six months, it was paying for itself.

Think Tank moved to Congress Street in 2012, and in 2016 he took over the space next door and doubled the size, to 10,000 square feet. Roche opened a smaller location in Yarmouth in 2014, and in 2015 leased 3,000 square feet in the Pepperell Mill in Biddeford.

Clients not only include self-employed and remote workers, but political campaigns and satellite offices of businesses and startups.

Think Tank and PelotonLabs, at 795 Congress St., the city's coworking pioneers, have been joined by The Engine Room, at 41 York St., Cloudport at 63 Federal St. and CoworkHERS at 411 Congress St. In Westbrook, LocalHost opened in 2015 at the Dana Warp Mill, at 90 Bridge St.

The newest coworking space in the area is SoPoCo.Works, which will be at 1486 Broadway in South Portland, with an open date tentatively opening spring.

Newer spaces stress the differences that make them stand out in the growing Portland-area market.

Engine Room leans toward tech professionals and companies. Cloudport, opened by Nik Caner-Medley, a graduate of Portland's Deering High School who now plays professional basketball in Spain, offers amenities that include concierge service, showers and free coffee and beer.

CoworkHERS is designed to support female professionals, and also bills itself as a social club, offering seminars and other activities aimed at motivating and supporting members.

A no-frills approach

James LaPlante, like Roche years before, was looking last year for a space to share with others whose work is similar to his, but was having trouble finding it. He runs Sputnik Animation out of an office building he owns at 1486 Broadway in South Portland.

“In networking with people and talking with people, I realized instead of going downtown, there was enough interest to bring people here,” he says, over the sound of hammers and saws. He hopes the renovation will be done by March.

LaPlante will initially use about two-thirds of his 3,700-foot split-level building for the coworking business. It has eight private offices, open desk areas, a small conference room and a studio — room for about 30 members. Those who produce video or animation can also rent storage space or equipment.

The space isn't limited to those in video production — it's for anyone who wants the environment he's offering, with some limits.

“I'm taking a no-frills approach,” he says. “There's no free beer and coffee.” SoPoCo.Works is for people who want to focus on work, but also want the collegiality and potential for collaboration that being brings.

“I want to build a community, but I want to build a place where the community drives what we do,” LaPlante says. In other words, events and other extras will come from the members.

Not a get-rich-quick scheme

LaPlante said Liz Trice of PelotonLabs “was really helpful” when he started planning. Her advice led him to put in more offices and less open space.

“There's a demand for small office space,” he says.

Roche agrees — there is a waiting list for his small private offices at Think Tank.

Global real estate company Jones Lang LaSalle estimated at the end of 2016 that there is more than 27 million square feet of coworking space nationwide.

“Regionally, overall in the market and country, it's definitely picking up steam,” says Nate Stevens, a broker with CBRE|The Boulos Co.

But Stevens says that, while demand for office space in greater Portland is down and vacancy rates are low, the coworking doesn't have much of an impact on the traditional market.

Portland-area coworking private offices are generally less than 500 square feet, a size that doesn't have market repercussions. On top of that, the overall amount of coworking space is low compared with other cities.

Still, coworking has found a niche. “It offers a quick solution, there's no long-term lease,” Stevens says.

Nationwide, Class A shared office space in a central business district may cost more, with the difference being amenities or services offered, according to Jones Lang LaSalle.

Some small businesses and startups find it more convenient to pay the higher square-footage cost and not have to worry about furniture, interior design, utilities and other costs.

Stevens says the spaces are great for incubating small businesses and startups, which then move to larger traditional office space in the city.

Roche says he's seen that happen many times.

“I've had members who started floating, then got a dedicated desk, then a small office, then a bigger one, then we part,” Roche says. “It's been great, but they have to move on.”

Some 25 to 30 successful startups began at Think Tank, he says.

Part of the appeal of a coworking space is the connectivity to others.

Roche says in all the years he's run the business, he can't recall a big conflict, raised voices or problems between members.

“Morale is easy to keep high,” he says. The fact the offices are open 24 hours, 365 days a year, they're dog-friendly and there generally aren't bosses hovering around, make it easier for those working there to be more comfortable than they may be in a traditional office.

Roche welcomes the competition in the greater Portland area, and says it hasn't hurt his membership numbers.

“As coworking goes mainstream, more will emerge,” he says. “As the market continues to grow and mature, it will find new niches.”

Despite their growth, coworking businesses run on tight margins.

LaPlante, in South Portland, is doing as much work himself as he can.

“A lot of it is DIY,” he says. One reason he's offering a no-frills space is to keep costs down, for both himself and members.

Roche, who's been where LaPlante was, says he walks a tight line.

“I think people see the big space and the quality of experience here at Think Tank and assume it's a huge money maker or that I personally funded it as a hobby or something,” he says. “Frankly, it's all sweat equity. I have one incredible employee. We work very hard to create a quality experience for our members.”

While he's looking at other markets, including Augusta, it's tough to find the balance between the cost of running the business and what members can pay.

“Coworking isn't a get rich quick scheme,” Roche says.

Economic catalyst

One hurdle LaPlante found was he had trouble explaining what coworking was to banks when he was looking for financing. A fellow coworking owner connected him with a bank that understood the business.

Even though he had financing, he entered South Portland's startup pitch contest last fall, where he made it to the final round, largely to get the word out about coworking.

“I wanted people to get what I'm doing,” he says.

Roche says that lack of understanding about the industry and its possibilities makes for a missed economic opportunity for Maine.

“[It's] an invaluable catalyst for local economic revitalization and small business incubation,” he says.

In 2015, the Maine Coworking Development Fund, administered by the Maine Economic & Community Development Department, issued grants to Fork Food Lab in Portland, Our Katahdin Properties in Millinocket and Think Tank, each of which received $25,000.  Open Bench Project in Portland and The Gem in Bethel each received $12,500.

Roche has supported other such efforts by the state.

“Smart cities and states are figuring out how to fund this,” Roche says. “[We should be saying] 'Here's legit startup capital. Go open a coworking space in Waterville, in Augusta, in Sanford.' That's what we should be doing.”

“It's a real opportunity, make Maine a place to remote work,” he adds. “We can tell people, 'Why not take that six-figure corporate job in Boston or Washington, D.C., and come to Portland, Maine, where we have the coworking space to support you?'”