LEHI — While turbulent waters continue to swirl ahead of an expected IPO, flex workspace behemoth We Company is set to open the first of four, expansive new office facilities in Utah on Monday.
The nine-year-old New York City-based company, which rebranded earlier this year from WeWork (now a division) to We Company, has piled up some $13 billion in venture backing since its launch, mostly from Japanese multinational SoftBank Group. The financing has driven growth that's helped the company put 485 flex/co-working facilities into 105 cities in 28 countries.
The company is bullish on Utah and has plans in place to open over 4,000 new individual workspaces in four large facilities along the Wasatch Front in the coming year. The first of two projects planned for the Innovation Pointe building in Lehi that opens Monday hosts some 970 desks, with a second phase and another 980 workspaces due to come online at the same address in early 2020.
BYU alumnus Nathan Lenahan, WeWork vice president and Mountain West region general manager, said as a person with close ties to Utah he was excited about bringing WeWork's flex office service to the state.
“While I currently live in Texas, every time I'm back in Utah it feels like home," Lenahan said. "My time at BYU and in Utah's Army National Guard were some of the most formative experiences I've had and it's so exciting to pay forward the generosity the Beehive State has given me by helping bring WeWork to Utah.
“WeWork might be a global company, but we show up with a hyperlocal playbook built to serve our members no matter where they are from or the size or stage of their organization, from a two-person startup to the one-third of Fortune 500 companies that call WeWork home."
Washington, D.C.-based home automation and security company Frontpoint Security is one of the new tenants in WeWork's Innovation Pointe workspace in Lehi. The company's chief talent officer, Bhavna Dave, said the plug-and-play office space made it easy for Frontpoint to expand into Utah.
"Frontpoint Security, the leading innovator in the home security industry, is excited to expand their footprint at WeWork in Utah," Dave said in a statement. "WeWork provides us with a custom workspace, promoting community and entrepreneurial spirit that aligns with the core values of our company. Partnering with WeWork will enable us to retain our existing team and attract new talent.”
Lenahan noted that Frontpoint, like all WeWork members, also gets access to the entire portfolio of the company's office space around the world.
“We empower companies to find and build community in thriving, innovative spaces in an amazing state like Utah without sacrificing global reach and connectivity," Lenahan said. "When you’re a WeWork member, you have access to our global community, from Bogota to Ho Chi Minh City, Lehi to Singapore.”
Utah has dozens of coworking and flexible office space facilities that offer hundreds of options that scale from individual, temporary workstations to entire floors for long-term tenants. Rental fees typically include some shared services, meeting spaces and business support necessities like internet access, copy machines and meeting spaces.
But none of the current coworking efforts in the state compare to the scale at which WeWork is launching.
Besides the 1,950 desks at Innovation Pointe, the company said it has plans in place to open 1,500 workspaces at two locations near the Gateway complex in downtown Salt Lake City and 680 desks on two floors in an office tower at another downtown location.
While the Innovation Pointe ribbon cutting Monday represents We Company's first Utah office facility, the firm established a Utah connection earlier this year when it acquired Salt Lake City-based office space management and analytics company Teem for $100 million. The 100 or so employees of Teem are now headquartered in another new We office space in Lehi, in the same building that houses the headquarters of Utah tech sector education and outreach group, Silicon Slopes.
Silicon Slopes Executive Director Clint Betts said WeWorks coming to Utah is another sign that the state's burgeoning tech sector is very much on the radar of the bigger tech and innovation world.
"WeWork’s large presence and commitment to Silicon Slopes is yet more proof of the sustained growth and formidability of our ecosystem," Betts said. "We’re thrilled to welcome them to our community.”
Salt Lake City's Impact Hub was among the first coworking efforts in Utah and has been operating for about 5 1/2 years. The five-story downtown location includes a variety of flexible spaces including private offices, individual and group work areas, shared conference rooms and larger gathering spaces that can accommodate events. Similar to WeWork, the Salt Lake coworking space is connected to a global network of similar hubs. However, unlike many other coworking operations, Impact Hub has embraced a committment to positive social impacts and caters to businesses and individuals that are engaged in mission-driven efforts with a social good component.
Impact Hub Director Heidi Gress welcomed WeWork to Utah and noted the growth in coworking facilities was a positive reflection of ongoing innovation growth in the state.
"As one of the first coworking spaces, we at Impact Hub are excited to see the exponential growth with the addition of multiple spaces this year," Gress said in a statement. "WeWork, the newest offering, only solidifies Salt Lake City in becoming a global business hub. We are hopeful that this adds to our entrepreneurial and startup ecosystem and we can work together in creating real opportunities for our local community."
The Utah Legislature has also thrown its support behind coworking space as a tool for economic development.
In the last session, legislators approved a plan to spend some $500,000 annually in an effort to cultivate coworking and flex workspace in Utah rural communities, via HB296.
The sponsor of the bill, Rep. Carl Albrecht, R-Richfield, noted in testimony during the 2019 session that creating workspace in rural communities was a missing piece in wider plans to build economic vitality in isolated areas of the state.
"Once we get people trained, and get employers interested with the (Rural Economic Development Initiative) program, then the third portion, of course, is a place for them to get together and work as a team," Albrecht said. "And that's this bill."
We Company filed paperwork to begin its initial public offering process in late April. 2019 is expected to be a banner year for multibillion tech concerns making the foray into the public markets, and so far this year Uber, Lyft, Zoom, Pinterest and Slack have made the plunge, with mixed results.
We's last public valuation was $47 billion and while the company reported it doubled revenues last year, its losses also doubled. Industry watchers have noted the company's debt load, including tens of billions in lease obligations as of the end of 2018, may be of concern to potential stock investors.