A Student of the Real Estate Game

(ASotREG)

The Future of Work and the Emergence of the “Neighborhood Clubhouse”

Aug 20, 2021 | Innovation, Technology

I’m beyond tired of hearing about the future of work. Every podcast, email newsletter, and blog has covered it ad nauseum for the past 18 months. The barrage of headlines, either in support of or against remote work, is adding fuel to the “debate” and forcing people to choose sides.

Having said that, I’ve been so frustrated by the narrative, that I wanted to put my thoughts on the subject on the record. What’s great about this format is that it’s my bar and I’m the bartender. I can write about anything that piques my interest and have a record of my thinking. I can look back in 10 years and see how wrong/right I was.

So here goes:

COVID was an accelerant for many trends, including remote work.  I pulled this chart from ‘The Real Estate Philosopher’ and overlaid my own trend line in red. Remote work was increasing pre-COVID and now the trend line has been accelerated.

This is a pet peeve of mine. Let’s stop calling it WFH.

This is not a one-size-fits-all conversation. Every single business is different, and everyone has different motivations and incentives. Some businesses will create virtual work infrastructure, while others will resist (at least initially).  

Ignore the headlines. These are the outliers. Morgan Stanley and Goldman Sachs requiring workers to go back to the office is a juicy headline just like Facebook allowing all workers to be permanently remote or State Street shutting down its two NYC offices. These are the outliers which make for good headlines.

Businesses will have to adapt to the shifting demands of their employees. Most employees prefer not to work in an office 100% of the time. In a competition for talent, firm’s who meet the evolving demands of employees will outperform their competitors.

Technology will continue to progress and improve the remote work infrastructure and experience to the point where it exceeds the traditional in-person working environment. This was my thesis the last time I wrote about remote work in 2020.

The ability to hire the best talent, regardless of geography, will be a competitive advantage. This advantage varies by industry.

People don’t inherently hate the office. They hate the commute, they hate not seeing their families, they hate not having hobbies outside work, they hate being forced to an arbitrary 9-5 schedule, they hate the high cost of major urban metros etc.

The office isn’t dead, but the purpose/function of the office is evolving.  The office will become a place to bring recruits and impress them, to host clients, have all hands meetings, and train new employees. It’ll be a cultural touchstone for existing employees and a place to inspire collaborative conversations.

My wife and I and our two kids recently bought a home in Westfield, NJ. It’s a trainline town 25 miles southwest of Manhattan. We chose Westfield due to its good schools, proximity to NYC, convenient access for both our jobs, walkability, and vibrant downtown.

Since moving in, I’ve been going into the office 1-2 days per week. On those days, the entire team is in, so we focus primarily on collaborative work. When I’m in the office, it’s productive and it’s beneficial to be in-person. The other 3-4 days, I work from my home office. I have found this schedule to be the perfect balance and most optimal for my productivity.

However, my home office isn’t perfect. It lacks energy, there are distractions, and the lines between work and home are blurred. Every once in a while, I’ll work from a coffee shop downtown such as Boxwood, but that environment has its own limitations. It’s hard to take calls and it’s uncomfortable for long periods of time.

I need a space that isn’t my house and isn’t a coffee shop. Introducing the neighborhood clubhouse. A recent Bloomberg article coined the term and highlighted two such concepts, Switchyards in ATL and Daybase in NYC. The concept is a mix of coffee shop and coworking space, perfect for those who want to work alongside other professionals, but don’t want to commit to an expensive coworking membership.

Daybase seeks to fill the gap between office space and work from home. More specifically, these spaces are located in residential areas, close to where people live. These are not the places you go every day, but rather a place you can go for a few hours because the home office is not sufficient for what you’re working on. You may need a conference room for a meeting, or a room with great acoustics for a virtual presentation or podcast, or you just want to be inspired or need a change of scenery.

What’s missing in the ‘working’ ecosystem is a network of small offices that are fully on-demand, available when you need them, and that you only pay for when you use them.

Westfield, a town of 30,000 people, would be a great location for a neighborhood clubhouse. There’s a vibrant downtown, population density, and a large portion of residents commute an hour+ each way to NYC office jobs.

Chris Herd predicts the rise of ‘micro coworking’, which is a similar concept.

What’s evident today is that most people will not be working in a traditional office 5 days per week and there’s a gap in the workspace ecosystem between home offices, coffee shops, and co-working spaces. The gap is in location, function, and pricing models.

The neighborhood clubhouse is emerging to fill this void.