Reprinted with permission, Biscayne Times, 2017
Written by John Dorschner, BT Contributor; Photos by Silvia Ros
July 2017
In the burgeoning freelance economy, co-working spaces have flourished all over Miami
Here’s the future of working in Miami: Nesli Kilic, wearing a sleeveless black top and tan skirt, stands a bit nervously among tables in a lounge area on the fifth floor of a Brickell office building, in front of a display of Turkish “organic hand woven” towels and robes she’s touting for her fledgling company, Turq(u)aise.
Around her are fellow members of Quest Workspaces, among the many co-working sites in South Florida that are emblematic of one of the hottest trends in U.S. culture. She chats with them as they munch on skewers of fruit and gourmet Yummii frozen fruit bars (mango basil!) provided by another Quest member, A Branding Shop.
Kilic, who is 33 years old, is in her second year from Turkey, working hard to sell her upscale cotton wares to hotels and condos the old-fashioned way, “by foot,” to potential customers in Brickell, the Grove, and Gables.
She chose Quest’s Brickell location (1395 Brickell Ave.) because she wanted to project a certain image: “Brickell is real hard-working people.”
Co-working is often billed as the wonderful solution for the third of American workers who are part of the “contingent economy,” meaning they don’t get steady paychecks from employers. They’re also known as the “gig economy” — juggling multiple temp endeavors to make a living.
Several dozen such facilities have popped up in the past two years in Miami-Dade, offering shared desks or small offices (generally with glass walls), plus WiFi invariably described as “blazing fast,” kitchens, free gourmet coffee (and sometimes beer), free printing, manned reception desks, conference rooms to meet clients, seminars to improve your business, and often open 24/7 to “members,” as the renters are called.
“Freedom to work the way you want” is Quest’s motto.
They’re so prevalent, says Marc Miller, Florida research manager for JLL (Jones Lang LaSalle), a real-estate services firm, that “over the last couple of years, co-working companies account for almost a third of the new tenants in the [downtown area],” meaning the coastal area that stretches from the Rickenbacker to the Julia Tuttle causeways.
Is this a fad destined to fizzle? JLL issued an analysis last year noting that all these amenities come with a price, which “may become a tough cost to swallow” during the next economic downturn. “Going back to … your neighborhood Starbucks or your living room becomes a smart business move.”
When I started this story with a quick survey of online articles, I assumed I’d be seeing long rows of 22-year-olds hunched over laptops dreaming of developing the next Facebook or killer app.
But after visiting eight co-working sites, I’ve seen that the reality tends more toward people like Kilic: immigrants promoting non-tech international businesses. Most budding entrepreneurs I talked to were in their mid-30s, with the youngest 23 and the oldest 62.
In some locations, including those downtown, the offices are dominated by one-person law firms, architects, and real-estate brokers, plus scads of budding marketing companies, and graphic and web designers. Even the LAB Miami, a Wynwood space backed by hefty investments from the Knight Foundation to push Miami toward becoming a tech capital, now has non-tech members, including a pair of day traders and a Colombian company starting a brewery here.
On Brickell, where private offices are far more prevalent than shared desks, Quest hosts heavy hitters of the financial world, such as BlackRock, which has a dozen staffers working here, and others dropping by on their way from the New York headquarters to Latin America. The travel website Kayak has eight people working at Pipeline’s co-working space in Coral Gables, preparing the company’s entrance into the Latin American market.
Several co-working companies have Doral offices, mostly Latin American entities seeking inroads to U.S. markets. At Biznest in Coral Gables, there’s Bsensible, the U.S. branch for Spanish bedding products. At City Desk, a downtown co-working spot, over half its members are immigrants.
These foreign entrepreneurs have helped make South Florida the No. 1 region in the country for startups, according to the Kauffman Foundation, a Kansas City nonprofit that promotes entrepreneurial education and success.
At the beginning of this century, a “startup” meant specifically a tech company with a new concept aiming toward a rapid public stock offering. These days, the Kauffman definition means any new small business.
What’s odd about South Florida, says Kauffman analyst Arnobio Morelix, is that while there are so many startups here, South Florida ranks 39th of 40 regions in measuring companies that experience significant growth. Morelix calls that contrast a “pretty rare situation.”
The other anomaly in the Kauffman data: In South Florida, 40.4 percent of new businesses are started by first-generation immigrants, second only to Silicon Valley’s 41 percent. When you consider that Kauffman includes Fort Lauderdale and West Palm Beach in its area measurement, it’s certain that immigrant entrepreneurs in Miami-Dade make up a considerably higher percentage.
Lia Figueredo, age 29, works in a cluttered office at the MADE (Makers Artists Designers and Entrepreneurs) at the Citadel, a co-working space in Little River (8325 NE 2nd Ave.). On the wall behind her is a shelf of vinyl records. Two co-workers sit with her at a large table for her latest business effort, Defy Culture.
She worked for Ocean Drive and Miami New Times before deciding to become an entrepreneur. Figueredo describes herself online as a “polymath and intellectual eccentric specializing in graphic design, web development, and digital video.” She’s also been part of a dance project and a digital radio show.
In her latest incarnation, she’s producing local music events to promote beers, including Beck’s, owned by InBev, and employing up to eight for major shows. “We’re a little company with one big client,” she says.
She worked out of Panther Coffee in Wynwood for a while, then tried a desk at the LAB Miami but found it full of “suits who desperately didn’t want to be suits,” most of whom were already backed by outside investors.
As she grew and shopped for a private office, she rejected Wynwood because of parking woes and the perception that it was “too Williamsburg.” She found co-working spots on Brickell and downtown Miami “too corporate” and expensive, while the behemoth WeWork was too much “entrepreneurial bros,” and South Beach spots “too sterile.”
She settled on Little River, a less fashionable spot where director Johnny Lara tries to keep charges at least “20 percent below other places.” Shared desk space is $179 a month, and offices start as low as $450.
“Here,” Figueredo says, “I’ll bet not [any] company has an investor.”
MADE is billed as “co-working for creatives.” It has a slightly funky feel, with scattered couches, a pool table, and member art and photos on the walls.
It is home to places like Prism Creative Group, a marketing company whose leader spent the first six months working out of Angelina’s Coffee in Midtown. There are also three jewelry makers, a 50-year-old professor trying to set up a mentoring workshop business on the side, a T-shirt shop, a maker of hand-sewn swimsuits, and Cool Creative, a husband-and-wife team doing marketing for places like the Little Haiti Cultural Center.
Figueredo is right: co-working spots certainly offer highly different “vibes,” as they’re habitually called, with huge price differences. The cheapest choice is a “virtual office,” at $30 to $150 a month, providing a real address to send mail to and put on your business cards. It’s a slight step up for many at-home workers, and often a necessity for recent immigrants who need a firm business address to get bank accounts and credit cards.
For $179 to $350 a month you can get a flex desk, meaning you grab any open seat at a public table. For $350 to $550, you get your own desk, often with desk drawers you can lock at night. Offices, with doors that lock, can range from a few hundred dollars all the way up to $20,000 a month, depending on size and location, often with furniture provided.
All this is highly flexible and temporary; there’s no long-term lease, no damage deposit, not even a need to buy office furniture. Some co-working companies like to get three- or six-month commitments, while others are willing to do simple month-to-month, or even day-to-day or hourly pricing in a few cases.
Shared office space has long existed — small white-collar businesses using the same receptionist, waiting area, and conference room. Tom Blazejack, a longtime Miami real-estate appraiser, notes that such sharing tends to do well in boom times, when it’s expensive to rent space. An entrepreneur leases a floor for $5000 a month, for example, splits it up into 20 smaller offices for which he charges $500 a month each, and he brings in $10,000 a month.
“I think of it as ‘office hoteling,’ and I note that whenever the market is rising, real estate seeks the highest return by dividing interests into smaller and smaller bits,” says Blazejack.
The problem comes with the inevitable market downturns. The American wing of Regus, the major early player in shared offices, went bankrupt in 2003. Since then the company has rebounded and has several locations in Miami-Dade, but questions about durability continue.
Creators of the new co-working spaces say this time is different because Regus was simply offering corporate-style space, and today’s companies are adding unique services, with members helping one another.
“We’re trying to create a true community,” says Philippe Houdard, co-founder of Pipeline, which has five locations, including in Coral Gables and Doral. “We’re trying to add value. What you get with Pipeline is people — events, speakers — to find ways to help make companies successful.”
The new co-working also provides a studied casualness intended to appeal to the non-corporate young; there are communal lounge areas with comfy sofas and such. They also tend to be pet friendly. In almost every place, I saw a dog trotting around or sleeping at master’s feet as he pounded on his laptop. Many spots offer yoga and meditation classes to loosen up, plus tech talks and “life coaching.”
The most publicized co-working spot here is the LAB Miami (400 NW 26th St.). It has a few offices scattered around the perimeter, but the core is a large open space with rows of tables, the shared working space for about 150 members.
Thanks to links with the Knight Foundation and other entities, LAB Miami is well known as a spot for techies to get help and information. It offers members free parking, a major benefit in cramped Wynwood, and communal bikes for getting around.
“We have tons of amazing events,” says managing director Rachel Bickford. One recent example: Deloitte gave investment lessons to budding entrepreneurs.
Of course, the tech industry has become an extremely crowded field. Just while researching this story, I heard of two Miami efforts to create apps for mobile car washing — click and they’ll come to you — and it’s easy to imagine competing efforts in Raleigh, Atlanta, and many other places, as tech becomes part of the fabric of America. Saying a region needs tech is like saying it needs auto dealers.
A prime example of local tech sits these days at a communal table at the LAB: Brian Seamone, 34 years old, chief executive of Bleaufire.com, a startup that’s creating an app for managers of 15 to 500 properties to access any kind of repair help — plumber, electrician, painter — with a bidding process.
Seamone worked for a company operating deep-sea vehicles before deciding to strike out on his own. He began by working at home. But he has two small kids, and there were too many distractions, too much noise during phone calls, so he’s signed up for a $300-a-month “flex desk.”
He chose the LAB because of “the vibe here — people are really trying to change things.” Occasionally a fellow member has helped him with a software question, but mostly he works on his own.
Bleaufire has already has received a round of angel investing and is now ramping up for more money. “We hope we get to the point where we outgrow the LAB,” he says.
The 800-pound gorilla of the co-working world is WeWork, a massive worldwide company that has received billions from venture capitalists and is reported to have a stock valuation of $20 billion, with some analysts anticipating an initial public stock offering later this year.
WeWork has two sites on Miami Beach and, in the past year, added leases for two huge amounts of space: 96,000 square feet at the Security Building in downtown (117 NE 1st Ave.) that’s being redesigned for co-working, and 60,000 square feet at the newly opened Brickell Citi Centre.
Considering that Büro Miami and Pipeline, the two local major companies with multiple locations, tend to have offices of 15,000 to 30,000 square feet, the WeWork spaces are massive, and competitors wonder if they can offer the communal vibe that all sites strive for.
A visit to the new Citi Centre location found four floors open in an office building beside the new mall, with another floor scheduled to open later in the year. Each floor has a communal area — kitchen with gourmet coffee, sofas, and booths for eating and informal chats — a design that fits WeWork’s motto: “Workspace for escaping the grind.”
From the communal area, corridors lead to a maze of glass-walled offices, some so tiny they have just enough room for small desk and chair (for about $700 a month). One of the largest had a couple of dozen people crammed together peering at oversized computer screens, working for Wix, a global web design firm.
During a quick stroll in mid-May, quite a few offices seemed to be occupied, but there were also a considerable number of empty spaces.
One occupied space, a narrow office of three computer desks side by side and costing $1500 a month, belongs to AEI U.S. Studio. Founding partner Juliana Fernandez says the studio is the new U.S. wing of a Colombian company that does commercial interior design throughout Latin America. She says the company is entering the U.S. market to provide “an excellent product at half the expense.” It’s hoping to expand to 30 people in Miami, at WeWork or elsewhere.
Fernandez says she’s happy with WeWork: Members can use any location throughout the world, and it offers a shared health plan and discounts in the surrounding shops and restaurants. The Brickell location is near many potential clients.
Eva Garza, a workplace strategist with JLL, says she’s heard that a WeWork’s location on Miami Beach has filled up quickly, but that the Brickell location has had a tougher time getting members.
Miami competitors insist they haven’t been hurt by WeWork’s entry into the local market. “It’s the Starbucks versus Panther scenario,” says Masha Grinberg, Büro Miami’s director of operations, referring to the popular Wynwood coffee spot. “We’re locally owned, with a completely different atmosphere. We’ll always be frequented because we provide better service, at smaller, more intimate locations.”
Brian Seamone, chief executive of Bleaufire.com, at his “flex desk” at the LAB, where “people are really trying to change things.”
Real estate magnate Sam Zell is skeptical of WeWork’s model. “I wouldn’t let those guys near my business with a ten-foot pole,” he said in early May on CNBC. Asked if he would invest in a company like WeWork, Zell added, “We have yet to find out what happens to WeWork when the office market softens, which is probably not too long from now.”
Another skeptic is Laura Kozelouzek, Quest’s founder and CEO, who has been in the co-working industry for years, including a stint with Regus during its troubles. “It’s a real estate-based business,” she says, “and the business is susceptible to the real-estate cycle…. I’ve been through that several times.” As for WeWork, “they haven’t been through that.” Next downturn, “we’ll go through that and see how everybody does.”
WeWork’s Brickell reception desk said any response to a journalist had to come from its New York headquarters. I left my business card and asked for a call. I also sent four e-mails to the company’s media rep and regional vice president, asking how the Miami operations were doing. The company didn’t respond.
During my mid-May research, I saw Büro locations in Miami’s Upper Eastside and their flagship operation in Midtown Miami, and Pipeline’s Coral Gables office packed with people hunched over computers, but then there was Mindwarehouse, in a downtown office building. When I arrived in late morning, no workers were evident in its public or office spaces.
Nearby was StartHub, across Flagler Street from the county courthouse, where people were bustling around an upscale gleaming metal-and-glass interior.
Started by a father-and-son French team, StartHub (66 W. Flagler St.) was sometimes listed as a co-working space after it started in 2015, but David Bensoussan, age 26, the son of the team, now says flatly that the field is already saturated: “Co-working is not profitable.”
Instead, StartHub bills itself as an “incubator/innovation” center, offering to invest in the right companies. Its website seeks applications from those who want “Free Office Space + StartHub Growth Team + Your Company = SUCCESS.”
Bensoussan says that so far StartHub has been concentrating on European companies that want to get started in the United States, offering marketing and other services to them, as well as an office and desks.
One example: KF Beauty, a British cosmetics company with products like WunderBrow, a “high tech beauty eyebrow gel” ($22). Michael Malinsky, KF’s chief executive, says that over the course of a year at StartHub, his company grew from three employees to a couple of dozen before moving to its own office in Medley. He says he picked StartHub because of its central location, paid rent in a regular co-working arrangement, and didn’t use the other services StartHub offered.
Bensoussan says StartHub has now invested in Magic Xperience, the offshoot of a French company offering virtual reality with such items as paper plates printed with cartoon figures that become animated when viewed with a phone app.
How well do co-working spots perform in creating a sharing community that helps boost its members?
Several people at MADE at the Citadel say they’ve used a web or graphics designer on the premises, but in most cases people say they picked a spot primarily because it was cheap for the short term.
Ricardo Weisz, 62 years old, has used several co-working spaces around Miami in starting several businesses, including a large Regus facility near the airport where he found “more of a rigid clientele” and “no community feeling at all.”
He’s worked at home — “many hours staring at a computer screen” — and found “at lunchtime I have go out in the car,” just to get a bit of relief.
These days he has an office in Büro’s Upper Eastside space at 7300 Biscayne Blvd. for his franchise of Interim Healthcare, a home health-care operation. It’s close to his home, and he needs a place with a receptionist to take applications from potential caregivers and others. He has two full-time and three part-time employees sharing the office. “And it has a nice conference room,” he says.
He’s seen a bit of communal cooperation — a Lyft employee at the Upper Eastside location using a fellow-member marketing company — but generally there’s not that much collaboration going on, he says. Still, he finds it pleasant to chat with folks in the shared eating area, “but that’s not the main driver for us.”
His bottom line: He’s at Büro primarily because of the flexibility, meaning no long-term contract, and then because of convenience and price.
Now consider Big Duck Games, one of the most celebrated local tech companies, specializing in mobile gaming, notably Flow Free, which has been downloaded 200 million times.
While Büro primarily provides shared workspace, it also offers private offices like this.
The Big Duck husband-and-wife team of Michael and Sharon Newman worked out of their Gables house for quite a while, then bought a “drop-by” membership at the LAB Miami to support events there. But it turned out to be too much of a drive.
They became members of Pipeline’s Gables office in early 2016. “Mentally we were in a bit of a rut and were tired of working from home,” writes Sharon Newman in an e-mail. The Pipeline space was close to home, provided a conference room to meet people, and made it easier when they hired two employees. They work at Pipeline Monday through Thursday, and at home on Fridays.
“We joined the Lab largely for the community, [but] we joined Pipeline largely for the workspace and location,” Newman says. “Even so, Pipeline does have frequent events (coffee breaks, occasional lunches, or after-work activities) to create a sense of community, plus just working in the same space as the other members on a regular basis there is a nice sense of camaraderie. We haven’t necessarily made business connections with other members but we did…recently host a play-testing event where we invited other members to play-test a new Flow Free concept we’re working on.
“It was a quick and easy way to get feedback on our latest project,” she continues. “The members’ business areas at Pipeline are pretty diverse, so I’m not sure that many people are making connections that they actually do business with, but it’s still nice to work out of an office with a core group of people who you get to know a bit. This feels especially nice for us as such a small company.”
Some younger people in co-working spaces looked at me in amazement when I told them I’d worked for the same employer in the same location for four decades, with health insurance and a pension. Today, even big corporations are prone to using temp workers without benefits.
This is an issue that concerns Richard Greenwald, a Brooklyn College professor who has written frequently about labor issues in America. His latest project is The Death of 9-to-5: Permanent Freelancers, Empty Offices, and the New Way America Works. “There are still thousands and thousands of freelancers, many of whom who don’t realize that the economy is permanent this way,” Greenwald told PBS in a 2015 NewsHour interview. “And they’re imagining that, ‘Well, in six months or a year, I’ll get a full time job. One of these clients I’m working freelance for will just hire me full time.’ And the trend shows that that’s not going to happen.”
For the corporations, at least, the new worker flexibility extends to their choice of office space. “There’s less corporate spending on real estate,” says Garza of JLL. That’s why even a big firm like Huawei, the Chinese telecom giant with $5 billion in profit in 2015, chooses to set up camp at Pipeline’s Coral Gables headquarters rather than lease its own space.
Garza says the shift in big companies began as they allowed more employees to work at least part time from home. Also many travelers used to work from airports and hotel lobbies, but security concerns have put a crimp in such habits, and many Starbucks stores now frown on people camping out for hours, nursing a coffee while using free Wi-Fi — all factors that increase the demand for co-working spots.
When economists note that roughly a third of the workforce is now “contingent,” — meaning without a steady paycheck — that includes the self-employed. Many used to think “self-employed” was a cloak used by people who had lost their jobs, but the Kauffman data show that 80 percent of those starting businesses in South Florida were employed before deciding to go out on their own, and that’s true of most metropolitan areas.
In fact, lines blur between entrepreneurial dreams and salaried jobs as younger workers juggle several endeavors at the same time.
Step outside for some fresh air: Midtown’s high-rise condos from Büro’s balcony.
Cristina Ocando, 31 years old, a Venezuelan who manages City Desk, is developing an events-planning business. Beca Sanderson, membership director at Büro Midtown, is also a “certified holistic health coach,” with a website offering “a 28-day body revitalization.”
At MADE, a 36-year-old fashion designer who calls herself McLaine O, sews her own dresses and swimsuits but on the side makes a third of her income by doing makeup for TV productions and “designer weddings.”
That work flexibility extends to office space, for both people and corporations.
Take Miami’s Gucci operation. They had an office at Büro Midtown but cut back to shared desk space because the staff was traveling so much. Kayak’s Carolina Montenegro says they set up camp at Pipeline Gables because it’s the “easiest way to get going.” They can expand easily or move to larger quarters if the need arises. Not stated: They could also shut down quickly if the venture proves unprofitable.
All of this contingency doubles-down in Miami, where so many come from other places. “Miami is very transient,” says Büro’s Grinberg. She views that as a positive for co-working: People new to town “want to network and make new friends,” so a co-working spot is ideal.
And if they want to leave, that’s fine too, because work flexibility is key. “That’s what we aim for,” says Grinberg, emphasizing the positive of companies starting with one to three employees and the ability to expand to 5 to 20.
Of course, members are also dropping out of sites every month. Bickford at the LAB Miami estimates a ten percent monthly turnover rate, but there are newcomers coming to replace them.
Kozelouzek of Quest knows co-working sites must “make sure we deliver to their expectations” in order to survive, but the concept has now “permeated the real estate game…. It’s clearly not going away.”
Author Greenwald pointed out in his 2015 NewsHour interview that contingent workers are operating “without any safety net. They’re holding all of the burdens, all of the risks that used to be carried by employers or institutions on their own shoulders,” he said.
“They don’t have defined benefits. They don’t have healthcare. They’re working from gig to gig. And the system that we’re operating under is still geared to a nine-to-five, permanent, full-time job economy. Our political system, our economic system hasn’t caught up.”
That is what has sparked considerable anger from both young Bernie followers and aging Rust Belt Trumpers: no steady work that earlier generations had been able to count on.
Still, Greenwald added: “This is the new normal. It’s going to only intensify, and then the question is: What do you do?”
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