May 18, 2020

Baltimore coworking spaces stay flexible during coronavirus, prepare for shifts in office use

Baltimore's coworking spaces, normally bustling with entrepreneurs and small business people working and collaborating side-by-side, have been quiet and sparsely occupied since coronavirus hit Maryland in mid-March.

These spaces, which have faced financial losses during the pandemic, may soon become hotbeds of activity as companies nationwide mull whether more flexible office models may be better options moving forward. But for now, they are working to remain afloat, and to find ways to continue supporting the young companies that make up their memberships.

Lisa Frank, a co-owner of Lauraville's Function coworking operation, said while her space has remained open to about 45 member businesses and their employees, the vast majority have stayed away from their rented offices while Maryland has been under a stay-at-home order. She said Function has felt some serious revenue pressures as some companies have had to cancel their memberships, and other sources of income like large meetings and events have been entirely halted for the time being.

"The whole idea of 'coworking' is kind of at odds with what we’re experiencing right now," Frank said. "We've had to have a lot of serious and confusing conversations about what to do with the space."

Frank said she felt it was important to keep the space open in some capacity so as not to totally "disrupt people's incomes" during the ongoing crisis. She said Function has kept its members informed about enhanced safety and cleaning protocols for the space, and been a bit more flexible about membership dues so companies could keep doing business however they saw fit.

Other Baltimore coworking spaces, including Spark Baltimore at downtown's Power Plant Live! and Betamore in Port Covington, have taken similar approaches during the pandemic. They have remained open to members who need to come in to the spaces to retrieve mail, or continue working as participants in industries that were deemed "essential" during the statewide stay-at-home order.

Shervonne Cherry, community director at Spark, said about 10 member companies that fell into "essential" categories have continued working out of their rented office spaces. She said the space has also been actively reaching out to all its members and offering assistance as needed, including helping some with emergency federal loan applications and continuing to handle administrative operations, like mail distribution.

"I think this has really shone a spotlight on exactly why spaces like Spark exist, to help these companies with some extra guidance during unfathomable times," Cherry said.

During the stay-at-home order, Spark also implemented a rent forgiveness plan to help relieve some financial pressure for its members. Although it meant a large short term revenue hit for Spark, it's a move that seems to have paid off as the space has not seen a single membership cancellation among its 150 member companies, Cherry said.

"We didn’t see how making members pay their rent when some people literally couldn’t leave their homes made sense," Cherry said. "We're really just trying to live up to the mission we’ve committed to of being a catalyst for entrepreneurship...and supporting our members however we can."

Cherry, Frank and Betamore's Kimmy Andrulonis agreed they are all looking forward to welcoming back all their members whenever they are comfortable and able to return. They are closely monitoring reopening guidance from the state and local governments, and developing plans for how communal and office areas can be enhanced or altered to allow for continued social distancing.

As these business leaders are focused on keeping their coworking businesses alive, they are also looking ahead to what the future of the business ecosystem may look like and what kind of role coworking will play. Cherry said over the last several years, there had been a slow-building trend of more and more companies, and especially smaller and tech-oriented businesses, opting to forgo renting their own larger office spaces. She said many companies have realized during Covid-19 that their workforces can still be productive even when they aren't coming into the same space every day.

Frank echoed Cherry's view, noting that coworking spaces generally offer much more flexible leasing models, in addition to built-in amenities and services like mail handling and Wi-Fi.

"I think right now, the idea of not being locked into a long-term lease is going to be very attractive as people look at their options for the next few years," Cherry said. "This really could be a catalyst for coworking — although obviously not necessarily the one I’d have wanted."

In fact, Port Covington's Betamore is already seeing some of the effects of local companies' office reconsiderations. Andrulonis, who is director of operations, said she has recently been getting several calls from new firms that want to rent space at Betamore come summer. It is an encouraging shift and could help make up for some of the member and revenue losses the coworking space has suffered during the pandemic.

"We continue to get inquiries every week about new membership," Andrulonis said. "I think folks are realizing through this, maybe they don't really need a permanent Monday-to-Friday space work in. Here, they don't have to worry about a three-year lease, or paying for furnishings and utilities."

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