🔒While traditional office space struggles broadly, coworking giant IWG expands rapidly in CT

The post-pandemic world has been a struggle for many owners of traditional office buildings, as broader acceptance of remote work translated into far less demand for space. Conversely, for Switzerland-based International Workplace Group — a provider of small office and coworking space in over 120 countries — it has been a time of rapid growth. IWG has 31 locations in Connecticut, about double what it operated in 2019, said Ken Godek, area vice president for IWG. “Traditional office space in Connecticut is suffering a lot,” Godek said. “Since COVID, a lot of people don’t want to spend $30,000 a month to lease a floor in downtown Hartford. They proved during COVID that 90% of the workforce can work remotely, so why are they spending $30,000 a month to rent space nobody is going to use?”

But, many professionals also don’t want to work from home offices full time, Godek said. That’s where the flexibility of a local coworking space can have some appeal. During the first four months of 2025, IWG — which operates under the Regus, Spaces, HQ and other brands — opened three new Connecticut locations in Stamford, Shelton and East Hartford. It expects to open at least seven more in the state before the end of the year, including locations in Enfield and New Haven this month. Godek said the COVID-19 pandemic accelerated IWG’s growth by about seven years. “People who are up on their leases are not renewing,” Godek said. “They are going with our concept because they can cut that cost of $30,000 a month to $4,000 or $5,000, so they can have those 10 or 12 people they need in the office come in. And they can do it on a 12-month term, so they have flexibility.” In its first-quarter earnings report, IWG reported record global sales in March, even as the company expressed some concern about economic uncertainty in the U.S. First-quarter revenue was $1 billion, a 2% increase over the same period last year, while IWG opened 165 new locations globally during the first three months of the year.

Traditional office market struggles

While there are thriving pockets in the Greater Hartford office market, the region has generally not experienced a robust post-pandemic rebound in demand, said Joel M. Grieco, an executive director with real estate brokerage Cushman & Wakefield. Employers are increasingly calling more workers back to the office for longer portions of the work week, but this has not translated into companies reclaiming space they yielded since 2020, Grieco said. Instead, companies are going with smaller workstations. And, the downsizing trend is likely to continue for at least a few more years as long-term leases expire, Grieco said. Backfilling office space will require new companies to enter the market — not a dependence on long-established employers reawakening to space needs, he said. Unfortunately, the Greater Hartford area is not attracting many large new employers in dynamic growth sectors. “We are trying to do things with insurtech and biotech, but there’s not a gravitational pull for any robust industry where we will see new jobs,” Grieco said. The Greater Hartford office market’s availability rate stood at 26.4% in the first quarter of 2025, while the vacancy rate was 23.1%, up slightly from the previous quarter, according to Cushman & Wakefield. Some areas are struggling more than others, with the office availability rate in the region north of Hartford at 43.3%, and Hartford’s central business district at 36.1%. IWG and similar companies have always served a niche customer base: small-space users, newly established businesses or firms testing the waters of a new territory, Grieco said. “They like the flexibility and the high polish that a Regus location can offer without a five- or 10-year lease commitment,” Grieco said. “A lot of building owners don’t want to lease 500 or 1,000 square feet, and they certainly don’t want to do it on a short term.”

IWG wasn’t as negatively impacted in the immediate aftermath of the pandemic as many other office landlords, Godek said, and the company’s suburban locations picked up many of the workers fleeing city centers “Southern Connecticut experienced a rapid growth because many of the people who lived in that area no longer commuted to Manhattan,” Godek said. “A lot of people left Manhattan and moved to Connecticut and wanted to stay in those homes.”

New model

Historically, IWG has signed long-term leases with building owners and set up operations. Over the past three years, however, the company has adopted a “partnership” model relying on profit-sharing arrangements with building owners. That’s been the driver of rapid growth in Connecticut, Godek said. Owners offer up space and pay for fit-out consistent with IWG brands, while IWG markets and manages the site. This includes providing on-site staffing and support to clients, as well as off-site marketing and management staff. “If we have partners that have a piece of inventory and they can’t get anybody to lease it, with our concept coming in, we will be able to market it for them, bring all the revenues in, and now they are going to get a profit share in favor of them,” Godek said. “So, something is better than nothing for them.” IWG’s locations usually occupy a portion of a building, ranging from 5,000 to 30,000 square feet, Godek said. Profit-sharing deals vary from property to property, but they are “much more in favor of the landlord,” Godek said. IWG has also begun partnering with smaller coworking competitors, taking over management of their spaces and cutting them in on a share of the profits, Godek said. In late April, IWG opened a new Regus location in a 1966-vintage, 6,440-square-foot office in East Hartford. It’s a no-frills office that provides the basics — clean spaces, a front-desk staffer, free parking, a business lounge, internet access and a printer. Within three weeks of opening, five of nine offices had been claimed. Godek predicted the East Hartford location, which operates under a partnership model, will be a winner because prospective clients had long wanted an option east of the Connecticut River, to avoid bottleneck traffic through Hartford. In West Hartford, IWG’s two-floor “Spaces” location at Blue Back Square has a much more modern vibe. It opened in 2019, in a space that previously hosted outdoor merchandise retailer REI. On the first floor, the West Hartford location has booths and tables in a café-style setting. Light, upbeat music plays constantly at a low volume. For the past six months, Samantha Johns and Veronica Niedmann have occupied a booth most Tuesdays and Thursdays. Johns is global head of operations for London-based consulting firm eatbigfish. After a decade working from a home office in Manchester, she signed up for an IWG membership after hiring Niedmann as a project coordinator.

Johns explored a couple other coworking operations and opted for the West Hartford Spaces because of its “really nice vibe.” She also appreciates the flexibility offered by IWG. Her plan allows her to visit five days a month, but she can move up to eight days, 10 days or unlimited, and back down again, as needed. Her plan also allows her to access business lounges in other IWG locations globally, or rent meeting space for larger gatherings. “It’s really important culturally to have a space with other people and not just invite Veronica to my home office — to feel inspired and motivated,” Johns said. “That’s what I think this space gives us.”