Coworking sites surging in Philly

In 2007, Indy Hall in Old City was the only coworking space in Philadelphia.

Eight years later, Indy Hall buzzes with more than 300 member companies. And now it's one of at least 16 coworking spaces in Center City. An additional 11 sites have sprung up in South Jersey and eastern Pennsylvania.

"Coworking has been growing globally by over 100 percent a year for at least five years now," said Alex Hillman, 31, the founder of Indy Hall. "It's happening on every continent except Antarctica. It is being adapted into endless styles."

Entrepreneurs in fields from law to cooking to clothes are flocking to the shared environments of coworking spaces because they offer cheap space along with the contacts and resources to grow a fledgling business.

A 2015 report from the commercial real estate firm JLL identified 16 coworking sites in Center City occupying 190,000 square feet of office space with an additional 20,000 square feet expected to open before year's end. That was up from 14 sites last year.

JLL's research did not include spaces that had specialized tools for engineering work, such as Philadelphia Woodworks and NextFab, devoted to technology and engineering. Including those specialty sites, there are 25 coworking spaces in Philadelphia.

"We're seeing companies that start with one or two people, so they're looking for something more flexible and affordable," said Clint Randall, a research analyst at JLL. "When a company is small, its largest expense tends to be its space. Plus, they're walking into an already established and furnished space."

The three largest coworking spaces in the city are Pipeline and Industrious, both in Center City with 21,000 square feet, and Innovation Center @3401 in West Philadelphia with 17,500 square feet, JLL found.

Yet an even bigger site is coming soon. WeWork, a New York-based coworking space with 42 locations in four countries, just signed a lease this month to open a 30,000-square-foot space at the Piazza in Northern Liberties, probably by early 2016.

Existing spaces have been growing smartly. CityCoHo, which opened in January 2014 at 2401 Walnut St., has grown from 25 members last June to 85 this month in a space that offers yoga and meditation along with an emphasis on sustainability. CityCoHo also is expanding, from 8,000 square feet to 12,000 square feet by the end of August.

"Today, everyone is focused on finding the next big thing, and it isn't found by one person," said manager Drew Foulkes. "It's about finding it with the help of a support system."

"Just watercooler talks can lead to bigger, brighter ventures."

Coworking sites - where entrepreneurs can mingle and support one another - have spawned a number of big successes. Uber, the famed car service, once worked in a coworking space. So did SnipSnap, a digital coupon app based in Philadelphia that has grown beyond its coworking roots.

When SnipSnap joined Venturef0rth, a coworking space, in May 2012, it had 150,000 users and three staff members.

By the time it left Venturef0rth in January 2014, it had 2.5 million users and eight staff members, said CEO Ted Mann. SnipSnap was acquired for $6.5 million in February.

Hillman of Indy Hall had strong personal reasons to do coworking. He was a freelance Web developer whose solitary work pushed him to start a coworking community.

"People walk in the door of a coworking space because they're lonely and unproductive in isolation," Hillman said. "Coworking provides a way to be around other people without actually needing anything from them."

Coworking also offers the chance for entrepreneurs to network, collaborate, and explore a world beyond their cubicle in a cozy and affordable space. It saves them the hassle of looking for an office space and maintaining it.

Cost is also a big draw for fledgling companies. Pax Tandon, a member at the Hive, a women-only coworking space, has been coworking for more than a year and said it helped her expand her brand and social-media presence.

"In business, success depends on your connections," said Tandon, 36, a positive psychologist and editor-in-chief for an online magazine. "Coworking is a good way to make friends, create and maintain connections with people from different backgrounds."

Coworking spaces do have their limits. Companies leave when they show substantial growth.

But for now, it's a base for Justin Jeffers, 28, who runs Jay Butler, his two-man online shoe retail operation, on a 2-by-4-foot desk at Benjamin's Desk, at 17th and Walnut. Next to him is a purveyor of orthopedic dog beds, and behind him is a food caterer.

"It's nice to have people working in different industries who are working on similar projects like photos and videos, because we bounce ideas off each other," Jeffers said. "Benjamin's Desk also has introduced me to some of their other support services, in terms of consultants they bring in to help with marketing. They also bring in angels and venture capitalists. I wouldn't get introductions like that if I worked alone."

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