At the start of 2024, commercial real estate firm Cushman & Wakefield put the Atlanta office vacancy rate at a record 24.6%.
That rate is similar over in Charlotte, Raleigh, and Tampa.
But it isn’t just Southeastern office spaces that are struggling. Across the US, office-using employment is not keeping pace with the increasingly hot US job market.
Since 2019, Atlanta-based Switchyards has been betting big that the nine-to-five office experience is dead. But that doesn’t mean the American workforce wants to be fully WFH (Work From Home). Instead of commuting to the office, employees want to leave the makeshift home office behind and find a “third space” to get deep work done.
The Switchyards team has built out 10 work clubs across Atlanta neighborhoods, each becoming a central gathering location for workers and small teams to gather in conference rooms. Last year, Switchyards started expanding into Nashville and Charlotte, bringing its member-owner work spaces to more Southeast cities.
Now armed with a new round of venture funding, Switchyards is looking to bring their work club concept to more cities across the country.
Behind The Switchyards Funding
The team just announced it raised $5 million in venture capital funding from San Francisco-based Bullpen Capital and existing investment firms Washington State-based Cercano and Atlanta-based Overline VC.
“There is an incredible opportunity right now to lead the consumer workplace category,” says Daley Ervin, a venture capitalist with Cercano and a Switchyards board member. “Work represents a third of our daily lives, and yet there isn’t a consumer brand owning the industry. We believe Switchyards will be the company to lead this new category and to leverage this incredible market opportunity.”
The Switchyards team laid out aggressive growth plans following the funding news, as it looks to double its membership base and open 10 more clubs by the end of the year.
The team also plans to open 200 new clubs over the next five years with help from the recent venture capital investment, strategic debt, and reinvested profits from the business, according to a press release.
Switchyards’ Founder and CEO Michael Tavani said that they are still eyeing expansion across the South, looking specifically at large to mid-size “neighborhood-dense cities” like Houston, Dallas, Chattanooga, and Greenville.
“When we look at new cities, we start by looking for the most iconic neighborhoods. We don’t think of launching new cities as much as we think about launching in neighborhoods. The ones that are walkable and creative and full of energy,” he told Hypepotamus. “Not central business districts, but residential neighborhoods where people actually live. There’s a certain pride that people have in living in their neighborhood. That carries over to wanting to spend more time close to home and working in their neighborhood work club. For many members, it’s the first time they’ve ever actually worked outside their house in their own neighborhood.”
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Photo Credits: Switchyards
