More than two dozen people gathered at a loft-style space in Brooklyn last week with a desire to connect.
The group included a yoga teacher, a writer, a fashion designer, and a filmmaker, often traveling from different parts of New York. They shared a sentiment that working from home can get lonely and sat down at various tables to make artwork. The host of the event, held in an 11-story office building, was a startup called Fabrik that thinks it can help.
As the U.S. Surgeon General’s office in a 2023 study found about half of American adults reported experiencing loneliness, Fabrik is one of the companies around the country seeing a business opportunity in creating events to attract coworking clients who aren't just white-collar workers seeking a desk, chair, and coffee. It's setting up gatherings on topics ranging from business, dating, and mindfulness that also appeal to creatives, a group whose endeavors can be isolating.
Fabrik is creating member-based spaces that bring people together while addressing another problem: filling underused commercial buildings. Office vacancy remains near a record high in both New York and the United States despite improving signs, CoStar data shows. And that's spawning some new uses.
Fabrik, created as part of Hines Global Ventures in 2023 before it was spun off last year, opened its first location at a Manhattan Hines-managed building at 12-16 Vestry St. in June. The Brooklyn space, located at 20 Jay St., is its second and debuted Monday.
They both feature lounge spaces and long communal tables where members are free to stay and work at a daily rate of $29 and a monthly pass that starts from $250.
The firm was co-founded by its chief executive, Jaclyn Pascocello, whose career stints have included serving as operating chief of Spacious, the coworking provider that she said had expanded to 45 restaurant locations and thousands of members before it was sold to WeWork and later reportedly shut down in 2019.
Fabrik’s expansion comes as the term "third place," coined by sociologist Ray Oldenberg in his book "The Great Good Place," has increasingly become part of office design. The idea is that people want a place to gather that feels separate from home and work.
To be clear, Fabrik is just one type of firm offering so-called third places. San Francisco-based Groundfloor, for instance, has expanded to four locations in California while in New York, Luminary, with a location at 1204 Broadway, describes itself as a networking host of some 20 events each month. That’s not to mention a slew of restaurants, hotels, private social clubs, and event space providers that also aim for a piece of the broader experience economy.
With Spacious, you “started thinking about different ways to use real estate,” Pascocello said in an interview. “Fast forward to now … there was this opportunity to think about using waste in space again, but to pivot that thinking to commercial, and then also to what the biggest problem of our time is. … It was really thinking, ‘How do we use these commercial spaces to solve loneliness by bringing communities together?’”
Profitability in view
The Manhattan location, with more than 200 members and spanning 7,500 square feet, has reached profitability, according to Pascocello. Fabrik is eyeing profitability as a company in 2026, she said. The business model incudes ways to keep costs down, in part through signing flexible short-term leases with landlords at below-market rents.
Fabrik also seeks move-in-ready space without buildout needs. That allows an opening within weeks of signing a lease, Pascocello said. Both the Manhattan location and the Brooklyn space, at 5,600 square feet, involved just repainting and outfitting with Fabrik’s own furniture.
With “short-term leases, we don't get [tenant improvement allowances] from the landlord, so they don't have an investment to make,” she said. “They're comfortable giving us below-market rent because they don't do anything. There's a flexibility in how long we might stay, or if they do find a long-term tenant. We're able to reach profitability in a faster window because there's no [capital spending] and no payback” involved.
How fast and how far Fabrik can scale up remains a question. Gwen Wiscount, co-founder and operating chief, said the firm wants to open two more locations in New York this year — with four sites per major city as the ideal — as it looks to the future. Fabrik seeks space between 5,000 to 8,000 square feet typically.
Pascocello admitted Fabrik still has to convince the public why it’s not just another flexible workspace provider. Indeed, how Fabrik differs from the likes of WeWork often surfaced as a question from potential investors, she said. Fabrik is currently raising more money to fund its expansion beyond New York as Hines remains its largest investor.
WeWork scrapped its initial attempt at a stock sale in 2019 amid investors' concerns about its corporate governance at the time and years of what a number of real estate professionals have said was overspending on space in the decade after its 2010 founding. It later filed for Chapter 11 bankruptcy protection from creditors to cut down on leasing and other costs before later emerging as a leaner company.
A lot of investors “want to understand how we are different, from a real estate perspective, from WeWork, because everyone kind of saw what happened there,” Pascocello said. “I'm very explicit in explaining the flexible nature of our spaces … and our agreements and the amount of money that we spend.”
More than another bar
Two Trees Management, the owner of the Brooklyn building, did its own due diligence before signing Fabrik as it was showing the space with other prospective and existing building tenants, Jarad Winter, Two Trees’ director of commercial leasing, said in an interview, adding he went to check out Fabrik’s Manhattan location and attended an event.
“We are very impressed with the community aspect,” he told CoStar News. “We don’t view it as a coworking space. We view it as … a cool community-based spot for people to go. … They already have a lot of people come to the building. It puts a bit more exposure on the building and the neighborhood. … The more exposure the neighborhood gets, the more exposure our building gets. It’s only a positive for us.”
Two Trees has been part of the transformation of the area of Brooklyn known as Dumbo, short for Down Under the Manhattan Bridge Overpass, where the second Fabrik space is located, from a neglected industrial waterfront to a vibrant mixed-use neighborhood.
David Steinbach, Hines’ global chief investment officer, told CoStar News in an email that “Fabrik redefines the 'third place' beyond the workplace, focusing on social engagement rather than work.” Hines aims to develop “new products and services that address gaps in real estate and the built environment,” Steinbach said.
Office landlords increasingly see designs for third places, including a rooftop terrace or a lounge with a coffee bar, as part of amenity offerings that employers see as critical to help attract talent or bring employees back to the office, industry professionals have said. Some landlords have been known to outperform others by regularly hosting events at their properties.
“To attract talent back to the office, buildings have to do something above and beyond,” Will Grover, Newmark’s director of New York office leasing who is helping Fabrik seek new sites, said in an interview.
“There needs to be some kind of human element. … Putting a golf simulator and having a coffee bar is great … [but] if there’s no purpose or program or dialogue around it, it’s like another bar,” Grover said.
Updated March 28 to correct the spelling of the last name of Will Grover.