Tacoma losing downtown coworking space for artists as market changes, competition grows

Another local entity is leaving downtown Tacoma, this time a community organization’s coworking space.

Spaceworks Tacoma announced this week on social media it was closing its coworking site known as 1120 Downtown, formerly known as 1120 Creative House, at 1120 Pacific Ave.

The program’s director pointed to a changing coworking landscape, coupled with a number of vacancies at its site as of late 2022 as contributing factors.

“We realized that this was the ‘least worst time’ to transition out of the space,” Michael Liang, Spaceworks Tacoma director, told The News Tribune this week via email.

The site will be completely closed after this month.

Spaceworks Tacoma, which started in 2010, is a joint initiative of the City of Tacoma and the Tacoma-Pierce County Chamber. It primarily works to fill vacant storefronts and spaces in the city.

Its coworking space opened in 2015 on the building’s second floor, offering rentable studio spaces for artists, small businesses, nonprofits and others pursuing creative work. It later moved to the third floor.

Previously, the building was home to the Master Builders Association of Pierce County as well as Ticor Title Insurance.

“When we first started this program back in 2015, there were really only two other coworking spaces in Tacoma,” Liang wrote.

Now there are multiple ones within about a multi-block radius of the site.

Those entities include Worksphere, The Pioneer Collective/Court House Square, Traction Space, Union Club and Regus, with at least one more on the way.

Surge Tacoma runs Union Club and its founder, Eli Moreno, is redeveloping Old City Hall. Surge plans to offer coworking and office space at Old City Hall in 2024, with the property becoming the flagship for Surge operations.

Moreno was unavailable for immediate comment on the closure of the Spaceworks site.

Liang said with the changing market, Spaceworks is having to “think a bit more strategically about what gaps we can fill beyond private offices.”

He added, “We continue to hear a need for affordable artist studios and also micro-retail, and our long-term hope is to manage a new property, one on the ground level and activates the streetscape.”

Spaceworks also works as business incubator (training, workshops and coaching), on artscapes (temporary murals and art installations) and other special projects (limited run art exhibits and theatrical or artist residency, among others).

“Spaceworks continues to offer training and support to artists and creative entrepreneurs,” Liang noted. “Next week, we’ve got our winter Business Plan Cohort and Black Business Investment Program starting, and we just hired a new public art coordinator (Jasmine Brown) to support murals and other art installations.”

Closure joins loss of other businesses

Ideally a move would be timed with the closure, but that didn’t happen, Liang noted.

“Unfortunately, our news about our closure couldn’t coincide with the announcement of a new space,” Liang said. “We also didn’t intend for the announcement to come on the heels of other closures in Tacoma.”

The news comes the same week The News Tribune reported that University Book Store, also on Pacific Avenue, was closing its physical store on the campus as of Friday, switching to serve solely as an online retailer for University of Washington Tacoma.

On Sunday, Hello Cupcake closed its doors to its Pacific Avenue shop. Numerous other stores in the area have either closed or relocated.

The city finds itself evolving after years of the COVID-19 pandemic, lower office worker and UWT student populations and other inflation/economic pressures.

CBRE, a commercial real estate services and investment firm, listed Tacoma’s Central Business District office vacancy at 18.4 percent in its 2022 fourth quarter report, released Jan. 7, while Newmark, a commercial real estate advisory and services firm, listed Tacoma’s office vacancy rate at 10.1 percent in the fourth quarter.

The softening office market doesn’t necessarily portend the end of coworking; instead it could be a sign of another work shift.

Business magazine Fast Company reported in October that while the pandemic initially hit coworking spaces hard with shutdowns and restrictions, they now are “filling the gap in the hybrid workplace at a time when companies are losing significant money on empty office space, even as many employees still crave a place to connect with their coworkers ...”

For now, the task at hand is relocating current Spaceworks tenants.

In a Facebook post Monday, the organization said that it had served more than 35 tenants at the site since its 2015 launch.

“Since mid-November, we’ve worked closely with the eight affected tenants,” Liang told The News Tribune, “and most have signed new leases with one of our coworking partners.

“We’re planning to use this time to re-evaluate our business plan for managing space and work with our alumni and stakeholders to plan what comes next.”

What’s next

On Jan. 19, Spaceworks will have a public sale and give-away of its furniture (tables, chairs, desks, etc), from 3-7 p.m. on the building’s third floor.