Shared spaces

Will arrival of U.S. multinational help or hurt Montreal’s coworking community?

Concerns raised about entry of New York-based WeWork into the local market
Photo: Scott Beale / Flickr

A U.S. multinational real-estate renting company is set to expand into a new 60,000 square foot space in downtown Montreal, effectively doubling the size of its first, and thus far only, foray into the Canadian market. WeWork arrived in Montreal earlier this year with a large space in Place Ville Marie, adding a Canadian foothold to its rapidly expanding empire, which includes operations in 12 countries, including China, the United Kingdom and Mexico. In addition to the second Montreal location, there are also rumours of an expansion to Toronto at some point this year. Clearly, the company has its eyes set on Canada.

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WeWork and its investors are capitalizing on the growth of the coworking movement, which has exploded over the past two years, by rapidly opening large-scale operations around the world to cater to this emerging demand for collaborative workspaces.

And that demand shows no signs of slowing down. The 2016 Global Coworking Survey reported that the number of people using coworking offices increasing by over 30 per cent from 2015 to 2016, and is expected to grow by a similar margin in 2017.

At its best a coworking office is a hub for community and networking, and a way for those who often work alone to break their isolation.

Coworking offers shared office space and services to workers, often freelancers or those running small businesses and start-ups, who can then collectively reduce their costs. But it isn’t just about the bottom line. At its best a coworking office is a hub for community and networking, and a way for those who often work alone to break their isolation.

But WeWork is big business, valued at $16 billion and backed, among others, by J.P. Morgan Chase and Goldman Sachs. Like Uber, Airbnb and Amazon, the company seeks to become what’s known as a platform monopoly. In other words, they don’t just want a slice of the pie: they want it all.

Many of those involved in Montreal’s coworking community fear that the arrival of the multinational company is a threat to their industry. WeWork declined interview requests for this article.

“I think there is a lot of potential to create other [coworking spaces in Montreal]. I think there could be 10 times more,” said Vincent Chapdelaine, a six-year veteran of the coworking movement and co-founder of Temps Libre, a pioneering Montreal coworking space that functions as a cooperative.

“Some coworking spaces have a hard time finding tenants and leasing their desks, but I don’t think it’s because the market is saturated.”

Chapdelaine cited Barcelona,which has over 150 coworking spaces for a comparable population, and, unlike Montreal, has no WeWork offices.

So, what does the increasing presence of a major multinational mean for Montrealers looking to start their own coworking spaces?

“I don’t think we need them. It could have been a local company. I think it’s a missed opportunity for Montreal to just welcome WeWork. I think they’ve politically been very well welcomed,” added Chapdelaine. “There could have been locally developed projects that have the scale and reach that WeWork has.”

Jason Prince is a professor at the School of Community and Public Affairs at Concordia University, and a coach for PME-MTL, Montreal’s entrepreneurship centre that specializes in the social economy and social enterprise. He told Ricochet that the coworking scene in Montreal has exploded over the last couple of years, with so many entrepreneurs opening new spaces that it is difficult to keep track of.

“Will WeWork upset the Montreal coworking community before it has had the chance to come into itself? We just don’t know yet.”

He also noted that it is unclear what effect WeWork would have on the smaller coworking spaces in the cities it operates in, and how many opportunities for local entrepreneurs could be lost due to the presence of an economic giant like WeWork with exponentially greater access to capital.

“Will WeWork upset the Montreal coworking community before it has had the chance to come into itself, ultimately resulting in a loss of a wealth creation potential for Montreal entrepreneurs? We just don’t know yet,” said Prince.

A thriving, locally-grown coworking ecosystem would have many benefits for the Montreal economy, added Prince.

Back at Temps Libre, Chapdelaine thinks the city needs a new approach to coworking spaces. “The fact that WeWork has arrived should be a wakeup call to politicians and public institutions,” he noted. “With the right supports, Montrealers could have met that demand.”

“I think local government should understand more clearly how it can help local economic development and community development, and create incentives for entrepreneurs to create more co-working and hybrid spaces.”

Editors’ note: WeWork’s New York-based senior director of corporate communications, Dominic McMullan, first insisted on speaking to the author of this piece on background when approached for a comment. When the journalist declined and requested an on-the-record interview or a written response from someone at the company, McMullan insisted on speaking to his editor. During a phone call with one of our editors he agreed to arrange an interview with the manager of the Montreal space, only to retract that offer after delaying publication for 24 hours, responding by email that “this just isn't worth our while.”

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