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Case Study #5: Locations for Startups in the Game of ThronesThe Game of Thrones Case Studies

The above image displays the main space inside the coworking space of Residential Art and Technology Studio that resides in the nearly vacant mall of Dallas.


This sentiment for redefining mall usage is being echoed across the world. The following quotes are from an article on deskmag.com called Coworking spaces save Shopping Malls from the Retail Apocalypse written by Megan Hanney.


Coworking spaces have served a plethora of modern workers through physical spaces. There have been office blocks, private member clubs, coffee shops and more. Now, thereís a new trend on the horizon: coworking spaces in shopping centres. Whilst this might be an innovative environment for coworking spaces, the arrangement also forms part of the retail industryís move towards a new shopping mall model emerging in 2030. This trend isnít constrained by any region; itís unfolding on a global level with hotspots including San Francisco, Dublin, Shanghai, Melbourne or Moscow. What has the journey involved to date?
It didn't take long for 2017 to be coined 'the year of the great retail apocalypse.' Retailers closed an unprecedented number of stores with many filing for bankruptcy (such as Toys 'R' Us), whilst shopping malls simultaneously faced growing pressure to survive declining demand for physical retail space.
Diversification of tenants and technological enhancements might have been pursued by shopping centers as survival strategies in the past, but now are we seeing coworking spaces enter the mix. Coworking operators are taking space in shopping centers and shopping centers are developing their own coworking brands.
Why are Shopping Centers an Option for Coworking Spaces?
Retailers are taking less space and more space is available. Shopping center investment slowed over the past few years and renting space has become cheaper. Forecasts back in 2015 predicted a 20-25% rental decrease in Hong Kong. In 2016 retail investment in the Netherlands was down by 40%. In 2017 Manhattan retail rents fell by 13.4%, Canada had an average 30% retail vacancy rate, Australiaís retail investor intentions dropped by 10% and UK shopping center investment fell by 45%. Now in 2018, the likes of Ginza High Street in Japan are set to hit their lowest rent rates towards the end of the year.
Shopping malls have already tried filling space with hospitality and leisure facilities in the form of restaurants, cinemas, bowling alleys and even indoor ski facilities. However, these offerings arenít quite enough to avoid the approximate 30% closure of space required for shopping center supply to meet tenant demand.
E-commerce giants continue their notorious online role as the major driving force behind decreasing demand for physical retail space, not to mention the shift in consumer spending from goods to lifestyle experiences. Further diversification is required and itís starting to take the shape of coworking spaces.

Of course, the idea of using space in multiple ways and through multiple partnership has been ongoing for many years. Subway restaurants coupled with gas stations or a plethora live-and-work spaces populating the urban landscape or only a few references to reuse and redefinition of spaces. However, the difference between those multi-use scenarios and one where startups occupy shopping malls is the level of experience of the occupants. For Startups, the experience levels are low and the coworking space should compensate for those low levels with a suite of services that fast-tracks technical development, relationship building, and/or financial assistance. This is only a few ways in which a coworking space should support Startups when residing in a shopping mall. For the last three years, RATS has specialized in this type of coworking support.


Shopping Mall Owners and Coworking Brands
Westfield, in partnership with Forest City, is one of the first major retail outlets to develop their own coworking brand. In 2015, Bespoke opened on the 4th floor of Westfield San Francisco Centre. The 40,000 sq ft space is designed specifically as a retail-tech ecosystem supporting coworking, events, demos and pop up shops. The space is home to corporate and start-up members spanning industries such as payments, artificial intelligence, virtual reality, experiential, e-commerce, retail analytics and more. Bespoke hit full capacity after just 6 months.
On the flipside, we see independant coworking spaces signing leases with shopping centers. Dogpatch Labs is a start-up hub centrally located in Dublinís digital docklands and is CHQís largest tenant. The 1820s shopping center lets space to interesting tenants including the EPIC Museum, is close to the rail station and surrounded by likes of LinkedIn, Facebook and more.

RAT Studio, lead by a husband and wife team named Curtiss and Rentata Cathey, use a combination of technology and art to appease and invigorate members of their coworking space. The entrance to the main coworking area is shown above. There are other secondary coworking spaces that RATS manages throughout the Dallas, Texas area. Each space is build on the five star paradigms of perfecting mindset, commitment, workflow, confidence, and economy.

The entrance to any RATS coworking space is symbolic of a cultivating environment, not simply a comfortable environment represented by other spaces.

"The partnership is proud to launch Bespoke (outside image above) and showcase our commitment to supporting the future of retail innovation. A core pillar of Westfield's strategy is to better connect the retailer and shopper through the use of digital technology and Bespoke fits perfectly into this strategy. We are creating a physical ecosystem for companies to create, learn and test all within the shopping center environment. We believe this initiative is a world-first for a shopping center company", said Westfield Corporation Co-CEO Steven Lowy. "Westfield San Francisco Centre1s location next to Silicon Valley and in the heart of the downtown shopping district perfectly positions Bespoke to serve as a hub and catalyst for innovation in the retail-tech space", Lowy said.
Third Space Owners and Coworking Brands

For four years, the Grove coworking space in Dallas, Texas operated inside the confines of a 6-story Jewish Holocaust Museum as a third space. A Third Space has been used over the last decade as a means to adding a third or fourth dimension of practitioning to a traditional space such as a museum or gallery. In the case of the Grove, they modeled a marriage between their coworking space, several Jewish initiatives yielding social impacts, and a promissory partnership with a nearby Christian church located right in the guts of the urban downtown center of West End. Possibly, the coupling of these three entities could foray a favorable approach to a religious audience and patronage.

Similiarly, the mapping of locations for a coworking space could include museums and galleries. Naturally, establishing boundaries for partners of such ventures and their patrons could be challenging without clear insight into the mutual benefits. It is the goal of RATS to function in third spaces according to our five star set of perfecting paradigms that clearly define objectives for mindset, commitment, workflow, confidence, and economy.

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