WeWork executive Nicholas DeMarinis said the coworking giant is seeing interest in its flexible workspace tick up in the Washington, D.C., region as companies increasingly look to bring employees back to workplaces.
The volume of companies touring WeWork's Washington-area spaces increased 19% in January compared to six months prior, 38% compared to a year earlier and 65% compared to two years earlier, according to data DeMarinis shared with CoStar News.
This comes as WeWork plans to relocate its coworking outlet at 1201 Wilson Blvd. in Arlington, Virginia, to a newly designed workspace within the office tower this year. The building is owned by CoStar Group, the publisher of CoStar News, and houses its headquarters.
CoStar News spoke to DeMarinis, vice president of leasing for WeWork's East region, about office demand in the nation's capital and why more employers are seeking flexible-term and communal spaces.
The following conversation has been edited for length and clarity.
What trends are you seeing in Washington, D.C.?
Washington, D.C., is turning a corner. This is after facing multiple hurdles, including decreased funding for nonprofits and non-governmental organizations, a slower-than-expected return to office and multiple government shutdowns.
Within that, we are seeing footfall increase at our D.C. locations. In February, year over year, we saw an increase, indicating gradual market improvement. That increase was 4%, and we do expect that trend to continue as the D.C. market shows signs of a turnaround.
What's interesting, from our view of market trends, is that we see them before the market does because of our diverse member base.
We committed to $80 million in 2025 on a capital improvement campaign to optimize our global portfolio, and we're matching that again in 2026.
What type of demand shifts are occurring in the District?
We're seeing demand shift from traditional D.C. occupiers to emerging tenant segments seeking space.
In the D.C. market, when you think about the larger deals that are happening, it's still primarily being driven by law firms who are looking for Class A and trophy space. When you go just below that and look at the midsize requirements, we're seeing that primarily be driven by enterprises, and specifically those that are looking for homes for their government affairs, technology and artificial intelligence teams.
A lot of companies continue to come to us because they need a presence in D.C. with the expanding role of the federal government. Our D.C. member base is reflecting that breadth of companies, including technology, media, consumables, nonprofits and more.
Traditional occupiers, such as nonprofits and government contractors, remain an important part of our member base in the D.C. market. They're just moving at a bit of a slower pace as they continue to try to get a grip on the government funding priorities.
What are companies asking for?
They need flexibility of space, time and cost. They're coming to us because they need space quickly.
The interesting, and growing, trend we're seeing among enterprises is that they're requesting the same level of flexibility that smaller teams are. We're seeing the office and coworking sectors converge into a single, integrated real estate system.
An enterprise company might come to us and need a very large footprint. We can go out and source product on their behalf, manage that solution for them, and give them all the flexible benefits they would have in a WeWork membership agreement — but in a larger space built to enterprise spec and with flexible terms.
A member comes to us and says, "We need much larger space. We might need 20,000 square feet, which you don't have." We can go out and source that solution for them. We can help them survey the market and find a location that meets their needs. We can sign a lease on their behalf, they sign a membership agreement with us on flexible terms, and then we operate that location for them. So, they get all the benefits of a WeWork solution, which is community, amenities, flexible terms, in the space that they need, but they are not stuck in a traditional long-term lease.
Is WeWork looking to expand?
We're always keeping a pulse on demand and, if it meets member demand and we have demand to capture, potentially locations. One example of that is our new floors at 1201 Wilson, which will be coming on this year.