WeWork is making its first foray into Canada with one of its biggest expansions as it seeks to tap demand from creative types and contractors for shared office space.
The $10 billion startup will lease about 5574 square metres (60,000 square feet) – enough for 1200 people and at least 600 desks – in downtown Montreal, and also plans to open in Toronto, according to interviews with executives.
New-York based WeWork sublets office space it leases to individuals and small companies for rates from $63 ($45 USD) a month.
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“The way that people work is changing,” Dave McLaughlin, general manager of Eastern US and Canada, said after returning from Montreal last week. “What we’re really doing is meeting this demand for a new way of working that’s focused on collaboration, aligned values and the tangible business value of flexibility.”
WeWork, co-founded by chief executive officer Adam Neumann, typically seeks 10,000 to 30,000 square feet (929-2787 square metres) of space, and for its Canadian debut initially sought refurbished brick-and-beam offices. About a year ago it began looking at more traditional towers with an eye to refurbishing whole floors to include all the accoutrements demanded by millennials: micro-roasted coffee, lounge space and draft beer on tap.
The Montreal location spans two floors at Place Ville Marie, an office and retail complex in the downtown core of the French-speaking city. WeWork is set to open 300 desks on March 1, with 80 per cent already committed, and another 300 a month later. More desks are set to follow mid-year.
The Toronto site, at 230 Richmond St West, is a red-brick, low-rise building between the financial core and the fashion district that will open by the end of the year. Another start-up called Spaces also operates temporary office space in Toronto.
WeWork members have access to desks in six countries including the US, UK, Israel and the Netherlands. The company also expanded to Berlin in January, and will soon launch in India and Mexico City.
WeWork’s Bryant Park offices in New York City. Photo: WeWork
“When we first started looking at Toronto and Montreal, both markets were challenging from a real estate perspective in terms of finding space that worked for us,” Miguel McKelvey, co- founder and chief creative officer, said by phone from New York. “It’s a tight market.”
McKelvey said the company is also expanding into residential real estate, with a housing component in its Crystal City tower in Arlington, Virginia, a burgeoning tech hub. It’s opening for a test in the northern spring, though a date hasn’t been set yet, and is considering other cities for the model. He declined to provide details.
A round of funding last year by the company valued the firm at $10 billion, people with knowledge of the matter said at the time. Company executives declined to comment on the valuation or the appetite for an initial public offering.
The technology sector accounted for 38 per cent of Canadian office leases in the second quarter of 2015, according to CBRE Ltd, the world’s largest commercial real estate brokerage.
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