Is co-working taking over the world? Maybe not yet, but it will have a very big presence in the Uptown area of south Minneapolis. New York-based WeWork Cos. has inked a deal that more than doubles the amount of space it will lease in the new MoZaic East building, which is not yet complete.
Last December, WeWork announced that it would lease 46,000 square feet at MoZaic East. Now WeWork has expanded that deal and will lease 102,000 square feet of office space – effectively half of the entire 198,000-square-foot building which is being developed by the Minneapolis-based Ackerberg Group. MoZaic East is slated for completion in the fourth quarter.
Co-working has traditionally been space used by freelancers, independent contractors and startup entrepreneurs looking to share workspace with like-minded professionals. But Stuart Ackerberg, CEO of the Ackerberg Group, says that WeWork is now drawing increased interest from companies looking for space.
“There’s been a lot of demand from companies that want to be in the greater Uptown area,”
In commercial real estate it’s almost unheard of for a tenant to sign a significantly expanded lease deal before a new property has even opened.
“I haven’t seen it before,” Ackerberg tells Twin Cities Business.
“We are excited for the opportunity to expand in Uptown as it continues to attract businesses that are looking for a flexible workspace and a vibrant community,” said Megan Dodds, general manager for WeWork’s Midwest at region, in a statement. “We’ve seen great demand for this location since we made our initial announcement, and we’re excited to be able to provide the WeWork experience to more small businesses, mid-sized companies and even large enterprises.”
The Ackerberg Group completed the first MoZaic building, which combined office space and a parking ramp, in 2012. It was a rarity for Uptown: a brand-new office building with large floorplates.
Alchemy 365, a studio offering yoga, strength and cardiovascular training, will lease 5,760 square feet on the ground floor of MoZaic East. At this point, Ackerberg does not have any other signed leases for the building.
Uptown will mark WeWork’s second local outpost. The co-working giant opened a 53,000-square-foot location in Capella Tower in downtown Minneapolis in October 2017.
WeWork is aggressively expanding across the globe but it also posting big losses. Just last week WeWork disclosed that it had raised another $1 billion in financing from Tokyo-based SoftBank Group Corp. Its valuation has been estimated at $20 billion. The Wall Street Journal reported that WeWork’s revenue for the first half of 2018 more than doubled to $763.8 million. But the company’s loss for the first six months of the year more than tripled to $723 million.