Inside the IWG Strategic Partnership Journey: Converting Empty Space into Profitable Workspace

The landscape of workspaces has undergone a profound shift over the past few years, which in turn has started to revolutionize the commercial real estate industry. IWG (International Workplace Group), the world’s leading flexible workspace provider with over 4000 locations across 1,200 cities worldwide, and its partners are navigating this transformation masterfully. Just take brothers Coury Jacob and Raymond Jacob, for example, who have harnessed their unique backgrounds to embark on a joint venture with IWG in San Antonio, Texas. 

In a recent webinar with 1851 Franchise, the Jacob brothers, along with CEO of IWG of Americas Wayne Berger and VP of Partnership Growth Jeff Bowron, shared some insight into the typical path of a strategic partner with IWG.

An Inspiring Partner Journey

Before navigating the complex landscape of turning empty spaces into thriving, adaptable work environments, the Jacob brothers brought diverse skill sets to the table, from real estate expertise to hands-on operational experience.

Raymond’s journey began in the realm of music and creative arts. With a background in operations and a penchant for fostering partnerships, he found himself at the helm of a music non-profit as COO. Coury, on the other hand, brought a robust background in real estate and finance, most recently pivoting to the real estate group at Wells Fargo, specializing in high-risk balance sheet loans secured by commercial real estate. His analytical prowess and understanding of market dynamics, along with Raymond’s background in coordinating partnerships and facilitating construction, positioned them to recognize the unique proposition of IWG's partnership model. 

"I've seen first-hand the trends of the office sector, especially large footprint spaces like our building, and I believed in the smaller format, office flexible workspace trend," Coury said. "IWG specifically was the market leader. Partnering with them, you are really benefiting from their expertise, their back end as far as I.T. and sales, and that is what you are paying for."

"My whole business model has been built on collaboration and partnership,” Raymond added. “After we did our due diligence on the IWG partnership program, we had a lot of faith in them because we knew we’d be partnering with the industry standard.” 

With their complementary skill sets, Coury and Raymond decided to join forces and set out to transform vacant spaces into vibrant, adaptive work hubs. Their partnership encapsulates the essence of the flexible workspace revolution, bridging the gap between real estate strategy and operational execution. Coury's strategic insights and Raymond's boots-on-the-ground approach culminated in the successful establishment of a 15,000-square-foot HQ flexible workspace at 8918 Tesoro Dr Suite 200, San Antonio, TX, 78217.

The HQ center quickly reached 50% occupancy within three months, surpassing their original projection of 85% occupancy in 18 months. “All signs show that the center is set to do very well,” said Raymond. “It has been very smooth and enjoyable. As far as running the center goes, it is pretty hands off. IWG has people there who are able to fulfill all those needs, so it allows Coury and I to focus on future growth.”

As traditional office models give way to flexible, purpose-driven alternatives, the importance of collaboration becomes evident. IWG and its partners, like Coury and Raymond, exemplify the power of partnership in navigating the changing landscape of commercial real estate. 

The Rise of Flexible Workspaces

The past few years have witnessed an unprecedented transformation in the way people approach work. The traditional concept of a fixed office space is no longer the norm. Instead, a flexible, purpose-driven approach to work has taken center stage. This evolution is driven by a multitude of factors, ranging from technological advancements to shifting attitudes toward work-life balance.

The adoption of hybrid work models, where employees split their time between remote and office-based work, has gained significant momentum. “Companies are reimagining their office space needs, moving away from large, fixed spaces to more flexible arrangements that cater to employees' evolving preferences,” said Berger. “In fact, 88% of companies have implemented hybrid working policies, reflecting a fundamental shift in how organizations view workspaces.”

Contrary to the misconception that hybrid work primarily means working from home, the data indicates a different reality. Workers are seeking to eliminate long, unproductive commutes, preferring to work in spaces close to their homes. The focus is on convenience and accessibility, allowing individuals to choose workspaces based on their daily needs. This trend has driven the demand for flexible workspaces in various locations, fostering a network of easily accessible options.

Recent data and trends underscore the magnitude of this shift. “Notably, the commercial real estate industry has experienced a seismic change,” said Berger. “Vacancy rates have soared, reaching record levels in major markets around the world. The rise of remote and hybrid work models has contributed to this change, leading to a reevaluation of the traditional office lease model.”

Traditionally, leasing office spaces for extended periods with significant capital investments was the norm. However, this landscape is changing. Workspaces are shifting from being capital costs to operating costs. As companies prioritize flexibility, the traditional 10-year lease is giving way to adaptable arrangements. This strategic shift maximizes operational efficiency and minimizes risks associated with static real estate investments.

IWG, a pioneer in the flexible workspace industry, stands at the forefront of this transformation. As the demand for flexible workspaces continues to rise, IWG has embraced the challenge and opportunity to reshape the commercial real estate landscape. The company recognizes that this is not merely a cyclical change but a structural shift that will redefine how people perceive and engage with workspaces.

Support in the Partnership Dynamic

Partners like the Jacob brothers who are joining forces with IWG to take advantage of this demand need to come into the venture with a collaborative spirit. 

IWG provides a comprehensive solution for business investors, offering a partnership agreement in which they invest the capital in converting the space into a flexible workspace. But IWG's role extends beyond providing workspace solutions. The company serves as a catalyst for partnerships that thrive on collaboration.

Partners are granted access to the world's biggest workspace platform, where IWG captures demand through a tried and tested sales and marketing engine, manages everything from fit out to day-to-day operations, and adds over 150 revenue streams to an empty space. All of this means partners can start driving profit in just 12 weeks. 

“The most important thing is to engage — we’ve seen a lot of different scenarios and challenges and we can help them work through it,” said Bowron. “The only way for us to determine if this is a great solution for you is to have a conversation and learn about what is happening with your particular portfolio, your business or your building. That way we can determine the financial output, the costs and the potential long-term ROI of an IWG center in your specific space. At the end of the day, we are committed to making sure the marriage between IWG and its partners is a great, long-term relationship.”

That is because each partnership with IWG is unique, reflecting diverse challenges and contexts. The Jacob brothers’ journey underscores the complexity of structuring agreements and understanding stakeholders' needs, for example. Innovative solutions, like creating single asset entities, emerge as key strategies to navigate these challenges.

“We are here to support you — we want every partner to make the best decision for themselves,” said Berger. “We are happy to work alongside each and every partner, regardless of the outcome, to help them see all the opportunities they have to monetize their assets. These investments are significant personally and financially, which is why we are so committed to support. There is so much demand out there and we can’t satisfy it without the help of amazing partners like Coury and Ray.”

Looking ahead, IWG is currently seeking business partners in key markets across North America as it aims to add 1,000 locations per year on its way to 10,000 total units. 

Overall, the Jacob brother’s journey epitomizes the transformation that can be achieved through partnership, innovation and resilience. As the flexible workspace landscape continues to evolve, these IWG strategic partnerships redefine not only physical spaces but also the essence of work itself.

For more information, visit iwgplc.com/develop-a-location.