On a Wednesday evening in November at WeWork’s new location in downtown D.C. near Metro Center, a few dozen millennials congregated over free drinks, with notebooks at the ready, as a panel of outgoing bureaucrats schooled them on how to break into the District’s insular political scene.
These were not the jeans-clad nerds who frequent start-up spaces in Silicon Valley and Brooklyn. These were sharply dressed policy wonks from Capitol Hill and the White House, contemplating an uncertain future under a president-elect who has promised to “drain the swamp” of its well-connected technocrats.
As WeWork has expanded in the city, it has taken on a distinctly D.C. flavor and has reached beyond the freelancers and start-ups that were once its target demographic. Today it leases space to the likes of Bank of America, Microsoft, General Motors, General Electric and Salesforce, big companies with deep resources that would typically set up expensive offices of their own where they would be locked into long-term commitments.
WeWork’s recently opened Metro Center location suits its new corporate clientele. An indoor balcony opens to an indoor courtyard with a glass ceiling in a building full of law firms and lobbyists in one of the District’s high-rent business centers. An open bar offers drinks to those winding down their workday.
WeWork is selling a sort of “co-working vibe,” targeting start-ups and larger companies in search of an entrepreneurial environment.
“The thing that we all need, whether we work for a small company or a big company, is a sense of community,” said Dave McLaughlin, WeWork’s East Coast general manager. “What we give you is the ability to plug in and collaborate with like-minded folks.”
WeWork’s marketing pitch emphasizes the work environment. The firm’s new Tysons Corner space, set to open Jan. 3, was designed with glass walls and narrow hallways to facilitate “serendipitous collisions,” where people from different companies encounter one another and work together.
For some, it offers a chance to find new business. WeWork says 70 percent of its occupants have collaborated in some way, and half have done business together.
Companies working in the space say prices are similar to other places they looked. WeWork says its spaces are cheaper than typical D.C. rates on a person-by-person basis, when its customers account for all the extra costs of maintaining an office.
The space goes beyond basic amenities such as WiFi to offer benefits such as pooled health insurance. The Tysons location will have grab-and-go food stops that can be charged back to the customer’s account, much like hotel room service.
The company is plugging into what it refers to as a “paradigm shift” in how business leaders view office space. For years, ever-rising rents have driven companies and nonprofit organizations to take up co-working spaces in lieu of a central office. Some have eschewed offices altogether as employees work from their couches, collaborating mainly on messaging services such as Slack.
WeWork is betting that the trend will continue as it pours capital into an aggressive local expansion. Since the beginning of 2016, the co-working space provider has quadrupled its local presence from 2,000 desks to 8,000. The local expansion mirrors an international growth spurt that added 58 locations in 2016 and expanded WeWork’s reach to six new countries.
“In terms of how much demand there is in D.C., we don’t think we’ve begun to see the limits of that,” McLaughlin said.