3rd Ward Shuts Down. Is Expansion to Philadelphia to Blame?
UPDATE: See here for the latest news.
The New York Observer reports that 3rd Ward, the creative co-working space headquartered in Brooklyn, abruptly shut down operations and is in serious financial trouble. 3rd Ward opened a Philadelphia location last year at Fourth and Thompson, and that seems to have put a serious strain on the company. The FAQ on a discontinued crowd-funding campaign includes the Philadelphia location both as a success and a challenge.
Successes. This year we opened in Philadelphia as our second location…
Challenges. Supporting geographic expansion has been costly and a change we made to one of our memberships, in an effort to improve it, caused a downtick in an important revenue stream for us. The full impact of these events took time to reveal itself. Meanwhile we continued to invest in improvements to our space, team and curriculum.
The new location in Philadelphia is requiring more capital than expected to achieve profitability or reach cash flow break-even.
As for the Philadelphia location, a DesignPhiladelphia event scheduled there has been cancelled, and the phone number is answered by a worrisomely automated, generic voice mail.