In the year since workspace provider WeWork closed the deal to buy Dallas-based Common Desk, the pairing has begun to gel: Common Desk is using its new owner's resources to help make its first market expansion outside Texas and North Carolina — with plans to open as many as 20 new U.S. locations this year.

New York City-based WeWork, fresh off its first profitable month in company history, closed on its purchase of Common Desk for an unspecified amount a year ago this week. At the time, Common Desk had a total of about 4,000 users at 23 locations across 13 cities in Texas and North Carolina. In the year since joining WeWork, Common Desk added eight locations to its portfolio and pipeline, and says it has had success in catering to workgroups of one to 10 people.

The combined entity is working to mesh Common Desk's work to construct luxury office space for less with WeWork's U.S. market expertise beyond Texas and North Carolina. Common Desk has a more living room-type feel, while WeWork is more office intensive with glass walls separating out offices.

"We are seeing more regional operators expand their wings and getting out into new markets." Nick Clark, founder and president of Common Desk, told CoStar News in an exclusive interview.

The dust is still settling on the integration of the combined company at a time when "coworking continues to grow and office space continues to get more complicated" for companies and their employees, Clark said.

That means challenges are still ahead for WeWork and Common Desk. The list of competitors is growing, including IWG, Roam, Industrious, Caddo Reimagined, Venture X, Serendipity Labs and Lucid Private Offices at a time when the future of office is muddied by companies still determining what their hybrid and traditional lease models might look like in the future.

Even so, since the acquisition, Common Desk has used WeWork's back-end systems, including its financial reporting to institutional investors and a better sales and marketing platform, with the deal also helping enlighten Common Desk as it looks at new U.S. markets to tackle.

"Businesses can now say they have optionality in how people work with a headquarters somewhere and the ability to work from anywhere," Clark said. "Tenants need a turnkey fully furnished solution and more landlords are entering the flex office space market to compete in that way."

At the end of 2022, WeWork's real estate portfolio totaled 779 locations in 39 countries, with all-access and on-demand consolidated memberships rising 56% in the fourth quarter year-over-year to 70,000. Common Desk, known for its Southern hospitality, is a small percentage of WeWork's overall business, but is expected to grow its U.S. footprint and serve markets not in WeWork's wheelhouse.

"The acquisition of Common Desk has enhanced WeWork’s network of flexible space offerings and supported our goal of strategic growth," Melinda Holland, president and COO of the Americas at WeWork, in an email to CoStar News. "We’re grateful to have Common Desk on our team and look forward to working together to support their continued success."

In its fourth quarter 2022 earnings, Common Desk accounted for 1% of WeWork's systemwide revenue. At the end of the quarter, Common Desk's occupancy was 78%, higher than WeWork’s occupancy, which as of September 2022 had climbed to 72% from 59% in September 2021. Common Desk said in a regulatory filing its occupancy was increasing an unspecified amount.

Pricing for Common Desk varies by market, but the company quotes a dedicated desk as ranging from $450-$600 per month.

WeWork is working with Common Desk to support its growth, including its coffee shop brand called Fiction Coffee. This month, WeWork opened the first Fiction Coffee location outside Texas, opening on the 37th floor of the WeWork Salesforce Tower in San Francisco as an amenity for its customers, which it calls members.

To help meet that tenant demand that has only grown since the pandemic, Clark said Common Desk is looking to help streamline the process for landlords by giving would-be members the office space its employees want to work in on flexible terms.

"We are able to be bigger partners to bigger landlords," he added. "Landlords can feel there's a bigger engine under the hood to service all types of landlords, but the consumer feel of Common Desk hasn't changed."

Those expanded relationships with landlords are leading to new deals and has Clark and his team looking to expand Common Desk to U.S. markets outside of Texas and North Carolina. This year, Common Desk plans to make its first new market expansion into the greater Phoenix region. Other new markets, including Salt Lake City, Denver and Atlanta, are also on the horizon for Common Desk.

"WeWork has helped us explore opportunities outside some of our legacy markets we are operating in," Clark said.

Even as Common Desk is broadening its business beyond the Lone Star State and North Carolina, its greater Phoenix expansion will have a Dallas connection. The flexible workspace provider is teaming up with the Dallas-based investment platform of Vero Capital to build out a roughly 30,000-square-foot location at its newly purchased Kierland II office building in Scottsdale, Arizona, by the end of the year.

Two other locations in Texas expected to open this year include a 25,204-square-foot location at The Hill in North Dallas and a 35,747-square-foot location at Canal Centre in Irving's Las Colinas Urban Center. The Irving location is set to open at the end of the summer, with the North Dallas location set to open in the fall.

In all, Clark said he plans to open 15 to 20 locations in various U.S. markets this year.

For new markets, he said, it means beginning to build out a network of locations. Common Desk expects to build out the greater Phoenix market with four to six locations, as it builds economies of scale. Each market will be different with three to four locations in Salt Lake City and other markets depending on the opportunities within them.

"There's also been a push into the suburbs in the last five years, with an additional push into secondary and tertiary markets," Clark said. "These new opportunities give us even more expansion options."