Pandemic doesn’t stop the rise of flexible and shared office spaces in downtown Salt Lake City

(Rick Egan | The Salt Lake Tribune) The new INDUSTRY development in the Granary District in Salt Lake City, Thursday, Aug. 6, 2020.

Three quirky and flexible work spaces debuting in Salt Lake City’s downtown offer one possibility of what office life could look like in a world transformed by the pandemic.

The new hubs inside Main Street’s Kearns Building, a huge overhauled foundry in the Granary District and a revamped produce warehouse on 500 South were all planned or underway before the coronavirus hit.

They are intended as varieties of less traditional shared offices, where businesses or individuals might lease a few desks to a whole room or more, with basic services like WiFi, printers and coffee pots.

“We like to say we create the perfect dinner party,” co-developer Ellen Winkler said of new trendy spaces at Industry SLC, carved into an immense former iron foundry and World War II machine shop that dates back 160 years and other renovated industrial buildings at 650 S. 500 West.

“And we truly do, because our tenants come from all different walks of life,” she said.

But the past five months have shaken up just about every aspect of workplaces and routines, including how we think about safety, hygiene, floor plans, elevators, bathrooms, doors knobs, co-workers and everything else involving personal and shared space on the job.

There’s a wide spectrum of these coworking, flex office and other less-typical office options, from chains like WeWork and Impact Hub to a host of other hybrids and local brands such as Kiln, but they generally share the convenience of paying a monthly fee or short-term lease for space and basic support instead of inking a longer-term contract.

Their other key selling point — the notion of spurring more collaboration and productivity by designing work settings with more common areas for socializing — now carries new and possibly long-lasting health concerns.

The virus has also sent a shudder like no other though wider office markets in Utah’s central business district, threatening a run of economic boom years for downtown that brought new residents and towers and plans for even more skyscrapers and housing as demand pushed rents steadily higher.

Rebound ahead?

Key projects on downtown Salt Lake City’s skyline — including a new convention hotel by the Salt Palace, several luxury residential and office towers along State Street and more — are still on track, insiders say, although some slowed construction and others sped up with shifts in supply chains and the labor market.

At the same time, the virus’ economic toll has cleared out office spaces across the downtown area for months as thousands of employees work from home.

(Francisco Kjolseth | Tribune file photo) A pedestrian makes their way to a TRAX station in a near empty downtown Salt Lake City during the COVID-19 pandemic on Wednesday, April 29, 2020.

A snapshot by the Downtown Alliance, an arm of the Salt Lake Chamber, indicates just under a quarter of office workers in the urban core reported actually working in those offices last week.

Several large employers in Utah’s capital haven’t seriously talked about returning to the office yet and others are delaying at least past Jan. 1, according to the alliance’s executive director, Dee Brewer. “They feel like they are productive, that they are safe and that for their work product, the situation is working,” he said.

So why, you might ask, would developers open new shared offices right now — or any offices for that matter — in the teeth of an ongoing pandemic and downturn?

Because like many builders, business analysts, real estate brokers and city officials, they believe the downtown office market is ultimately going to see a sharp rebound from any virus-induced dip and they are banking on demand rising.

“We’ve seen sustained interest in projects downtown and citywide despite the struggles presented by COVID-19,” said Ben Kolendar, acting director of the Salt Lake City Department of Economic Development. “Employers and developers are looking beyond the crisis toward the recovery.”

Some even think pandemic-weary investors fleeing U.S. coastal cities may eventually mean more cash coming into markets like Salt Lake City, especially as Utah’s unemployment rate stays well below the national average.

Places like Industry SLC, The Square with Industrious Salt Lake City in the Kearns Building and offices in the A&Z Produce site say that judging from leasing interest and that economic outlook, the momentum is there, in spite of a slight slowdown.

“We had a lot of people press pause, but that’s good,” co-developer Jason Winkler said of recruiting new tenants. Many, he said, have tempered their plans until surging COVID-19 cases ease.

“They’re not disappearing. They’re just hibernating right now,” he said. “It’s becoming clear to people that in short order, this is going to come back to normal and yes, they’re still going to need somewhere to do business.”

New layouts in new times

The further you get inside Industry SLC, the less it looks like any conventional office or assembly of cubicles and corner offices you’ve seen before.

(Rick Egan | The Salt Lake Tribune) INDUSTRY founders, Jason and Ellen Winkler in their new office development in the Granary District in Salt Lake City, Thursday, Aug. 6, 2020.

Jason and Ellen Winkler are the husband-and-wife owners of Q Factor and they have built similar projects in some of Denver’s up-and-coming neighborhoods. “Our design and construction lets us be really, really, really flexible,” Jason Winkler said last week on a tour.

Masks are a must in all common areas, according to rules posted on the tall front doors leading to an airy lobby, Publik coffee shop and mini-auditorium.

Ellen Winkler said the private areas of Industry SLC are designed for a wide and motley blend of spaces, open and enclosed. More typical meeting rooms and conference areas are interspersed with one-on-one huddle spots, cozy reading nooks and places to relax. Employees can also use private office areas and close the door, if they choose. Cleaners stand ready to wipe down any common area as soon as they’re used.

Further east at 136 S. Main Street, global developers with Texas-based Hines have poured $25 million into an overhaul of the historic Kearns Building. With partners at a national workplace firm Industrious, they’ve also created The Square with Industrious Salt Lake City, a 25,000-square-foot flexible workplace inside the iconic structure, built in 1911.

(Image courtesy of Industrious, Hines) A view of The Square with Industrious Salt Lake City, a new flexible workspace that has opened inside the iconic Kearns Building on Salt Lake City's Main Street.

“Amid this pandemic, many companies are looking to adopt a new structure where people can work from home some days, work from a local workplace that doesn’t require commuting on other days, and then commute into a downtown or headquarters location on occasion,” an Industrious spokesperson said in an email.

Tenants at The Square can do that, plus share access to lounge and event spaces, a gym and wellness center, and rooftop views. To react to the pandemic, the space includes hand sanitizing stations throughout, members agree to temperature checks, and upgrades have focused on touch-free technologies and improved HVAC systems.

It’s only Hines’ second flex space to open in the world, with the first in a 33-story tower in Houston.

The new offices going into the renovated A&Z Produce building along 500 South are more traditional, while the reclaimed building gives tenants their own entrances and flexible customized floor plans, according to co-developer Brandon Blaser. And if they need bigger spaces as they expand, more offices are coming with the nearby Post District, a massive neighborhood development he is also a part of across the street between 500 and 600 South.

Blaser, too, said he has a bullish view of downtown’s recovery. “We can incubate our tenants,” he said, “and still have that long perspective and ability to grow.”