Serendipity Labs creating flexible, class-A workspace at Innovation Square

Gallina Development Corp. is bringing high-end flexible workspace to downtown Rochester.

Serendipity Labs, which strives to combine the hospitality of resort hotels with the technology security needed for the country’s top companies, will occupy floors 23 and 24 of Innovation Square.

Serendipity Labs is the latest iteration of cowork/flexible workspace, catering to firms with a national footprint that don’t want the restrictions of a long-term lease.

“We’ve seen the world’s largest companies trying to figure out how to support their trusted-knowledge workers with better ways of working and good choices, but also meeting their workplace compliance standards — technology, security, personal safety — and work from home doesn’t do that,” said John Arenas, chairman and CEO of Serendipity Labs.

“Work from home may still be a place from time to time, but now there’s the idea — particularly in secondary markets and suburbs — of moving to a much more agile, outsourced workspace, an extension of your campus that you can turn off in a year from now if you need to or expand next week if you need to.”

Founded in 2011 in the Westchester County city of Rye, the company has 28 locations across 14 states, and expects to have close to 100 sites within three years.

Arenas has been in the cowork sector for close to 25 years, founding and operating Regus before selling and then moving on to his latest venture, Serendipity Labs.

“For large companies, our industry used to be swing space — temporary space until you had a ‘real’ office,” he said. “Now it’s become an alternative to a conventional office. It’s a quasi-permanent solution.”

While traditional cowork space is still popular, Serendipity Labs has found larger firms — ones requiring less than 10,000 square feet — want options outside traditional long-term leases in office buildings. The average initial term for a tenant is one year. The average stay is two or three years.

Serendipity Labs designs, builds and operates the space, providing the hospitality staff as well as a sales team. There are a variety of membership plans with private offices, team rooms and meeting space available.

“The demand for the service has grown by an order of magnitude,” Arenas said. “Because of the pandemic, companies have realized that they want more agility and flexibility in their workplace and in their real estate commitments, and so they’re moving to flexibility.

“So building owners can’t just say, ‘Here’s a 10-year lease, take it or leave it.’ They have to come up with something that meets the market.”

Gallina Development believes it can meet Rochester’s market demand for downtown flexible space as the licensee for Serendipity Labs. Gallina is continuing the re-creation of Xerox Tower into Innovation Square, a collaborative campus with student housing, technology, office, retail and theater comprising a full city block.

“We wanted to raise the bar for coworking in Rochester,” Evan Gallina, manager at Gallina Development, said. “Serendipity Labs offers a move-in ready, class-A flexible workplace, with a level of service that rivals five-star hotels. Rochester has a highly educated, world-class workforce that can benefit from shared offices of this caliber.”

Serendipity Labs has a similar location in Buffalo. The company moved into space on the 29^th floor of Seneca One in February 2021. The COVID-19 pandemic did slow growth to other markets, but it also created more clients.

The fluidity of the pandemic — with new strains of the virus curtailing back-to-office plans on several occasions — has led to the realization for some firms that traditional office space will never be the same.

“The latent demand has grown among large companies that were on the sideline waiting for a healthy workplace environment to bring employees back to,” Arenas said.

“Flexibility is the cure for uncertainty. If there’s going to be perpetual uncertainty, the way to deal with that is not with a 10-year lease and long-term commitments but with agility and flexibility.”

Arenas said several Fortune 500 companies, including Oracle, Amazon, Verizon, Anthem Health, Netflix and American Express, have space in various locations.

“Anthem Health, American Express, Amazon, they have regulatory standards for operating a workplace,” Arenas said. “For a health care company like Anthem, it’s HIIPA compliance, technology security, business process; but it’s also down to visual and auditory privacy, as well as how secure the printing is. Those things allow them to be in our facility.

“FINRA is a financial services standard. How the ethernet is connected, is it in conduit? All of these things could be shortcuts if you’re just a regional operator. But having a security certification down to the infrastructure level of your technology platform is critical. It is a cloud, but there’s a server somewhere. All of those things matter to these companies.”

The worker experience is just as important, he said.

“For the members themselves, our goal is to make them feel welcomed, valued and able to trust us with their daily life,” Arenas said. “And that also includes inspiring them with activities and events and programming, and also the way we manage the facility with respect to how they want their workplace run.”

He said Serendipity Labs doesn’t consider themselves part of the real estate sector but rather the hospitality industry.

“It’s easy to say hospitality, but to deliver on it, you really need a staffing ratio and staffing from the hospitality industry,” he said. “It’s not property management. Let’s just say there’s a high bar and we try to live up to it, that when you arrive as a member or guest, you feel valued.

“It’s about anticipating needs, surprising and delighting, exceeding expectations. Those things are not about the coffee that you’re serving, it’s about how you serve the coffee.”

[email protected]/(585) 653-4020