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Companies Like Hudson One In Nyack Have Diversified Income Streams With CoWorking Spaces
By Rick Tannenbaum
While Rockland’s Main Streets may be busy on nights and weekends, abuzz with restaurant and bar traffic, those same Main Streets can be ghost towns during the business day.
Main Street, in fact, has for many years lost day-time humanity to business parks or to New York City office towers. But now, a post-pandemic change is underway — New York’s office occupancy rate is 35 percent below pre-pandemic levels, according to a JLL report.
The pandemic has inadvertently created a new opportunity for downtown Main Streets: coworking and leasing of small office spaces and executive suites.
This is good news for landlords who want to get creative with their spaces.
As businesses in NYC, Westchester and elsewhere reconsider their commercial footprints in response to COVID-19, many are utilizing new and existing coworking spaces in Rockland County to provide remote workspaces for existing employees.
The economic benefits of this shift are two-fold. Underutilized offices in Rockland’s villages are suddenly in demand again. And, for anemic downtowns, the influx of workers occupying coworking spaces can provide a critical mass of daytime and early evening foot traffic, which is essential to struggling downtown retailers and restaurants.
For example, an underutilized architect’s office on Hudson Avenue in Nyack was converted during COVID to coworking and executive suites housing 18 unique businesses. Called Hudson 1 Nyack, it has brought new traffic to the village. Another space on Depew is under development for both coworking and event space.
The economics of co-working favors landlords and developers. Rather than sit with empty space holding out for $20 or more per square foot for large spaces, coworking and small office suites of 100-200 square feet can yield between $48 to $80 per square foot.
Shoppers, diners, and office workers eat lunch, buy coffee, and frequent existing retailers hungry for daytime customers. A publishing executive utilizing a local coworking space told me her NYC-based employer hopes to have employees return this summer but could not say for sure whether that would happen.
Another tech executive leasing coworking space was supposed to return to New York City last May but the return has been put off indefinitely. “I love working locally,” he said, “and hope to stay on working remotely permanently.”
When COVID-19 hit, many businesses transitioned their employees to working remotely from home to help stop the spread of the virus. But as quarantine continued, companies realized they didn’t need all of their existing office space. They have set up smaller satellite offices close to employees’ homes. And employees working from home sought more professional work environments near village centers – because let’s face it, it’s not always easy to resist the fridge or juggle kids and work.
“We’ve seen companies come out of the pandemic realizing that a more flexible work environment is something they desire,” says Julia Khomut, founder of Hudson One in Nyack.
While the term coworking may conjure thoughts of large open-air spaces and friendly social interaction, not all coworking spaces are open plan. Newer coworking spaces are designed for mid-career professionals who desire reliable internet, good amenities and a business-like setting for work and meetings. Conference room access and video conferencing are essential.
A company with headquarters elsewhere may use a coworking space to start doing business in the region before investing in a larger permanent commercial space. A win-win for everyone.
The pandemic has created a shift in how office space is used. That shift, many believe, is likely to become permanent.
Rick Tannenbaum sells commercial investment property with Houlihan Lawrence Commercial Real Estate. Phone: 917-689-1799 rtannenbaum@hlcommercialgroup.com