Good morning. The co-working space comeback; changes at Starbucks; plus, the Treasury Department cancels all of its contracts with Booz Allen Hamilton.

Greetings, CFOs. Flexible workspace is having a resurgence. And some of the world’s largest companies are using co-working space, Peter Grant reports.

Pfizer, Amazon.com, JPMorgan Chase, Lyft and Anthropic are some of those companies jumping on the co-working bandwagon. Today, co-working space in the U.S. totals 158.3 million square feet in nearly 8,800 locations. That is still down considerably from the years before the pandemic. But according to data firm Yardi, that number is up from 115.6 million in about 5,800 locations three years ago.

More context (and hurdles along the way): The shared-workspace business was one of the hottest in commercial real estate a decade ago, tapping into booming demand for flexible workspace among small and midsize firms. Then co-working got leveled by the office market’s downturn when the pandemic upended demand for corporate space. Some of the industry’s largest players were forced to seek bankruptcy protection, including WeWork in 2023.

Present day: As companies adopt a mix of office and remote work, co-working is once again one of the fastest-growing segments of the office market. Economic uncertainty and the rise of artificial intelligence are compelling more companies to embrace flexibility for their workspace.

The financial upsides: Shared offices allow employers to avoid long-term leases, adjust space quickly and offer employees in satellite locations the same amenities they use to lure workers back to headquarters.

The pace of growth is expected to continue. Companies say short-term, flexible co-working helps them create satellite offices closer to where employees live. Those spaces allow workers to capture the benefits of in-office work—collaboration, mentoring and access to amenities—without the time and expense of long commutes to headquarters.

📆 Earnings

• Boeing
• Seagate Technology Holdings
• Sysco
• Texas Instruments

📈 Economic Indicators

S&P Cotality releases the Case-Shiller National Home Price Index for November.

The Conference Board releases its Consumer Confidence Index for January.

Starbucks is meant to be different these days.

Brian Niccol, the company’s chief executive, spent his first full calendar year on the job plowing millions of dollars into improving the experience of Starbucks stores through barista training, outfitting stores with ceramic mugs and replacing faulty power outlets, according to Heather Haddon. He rewrote the guidebook for greeting and serving consumers, restricted cafe bathrooms to paying customers and returned condiment bars to the public. And he closed hundreds of U.S. locations.

Now, there’s more to come:

• Niccol wants to install more comfortable seating at hundreds of U.S. locations and make it simpler to pick up drinks.
• He aims to better keep food in stock, wants the chain to offer superior customer service, and thinks the messages written on cups can be meaningful, too.

How’s it going?: Investors want to know how his strategy will translate into growth. Starbucks has had a long stretch of stagnant sales, and the chain’s core profitability last year fell to some of the lowest levels since the pandemic.

Starbucks said that the work is starting to pay off, with record sales days during November holiday promotions, and new products helping to attract customers. The chain’s shares are up around 16% so far this month, outpacing a 4% increase for an S&P 500 subindex of restaurant stocks.

📰 Other headlines

• Booz Allen Contracts Canceled by Treasury Department
• Army Awards Salesforce $5.6 Billion Software Deal
• Nike to Cut 775 Workers at U.S. Distribution Centers as Turnaround Plan Progresses
• Ian Schrager Forges New Partnership to Revamp His Stalled Hotel Brand
• Fed Set to Pause Rate Cuts, With No Clear Path to Resuming
• Exclusive: Trump Administration Proposes Keeping Steady the Rates Medicare Pays Insurers
• Trump’s Tariff Threats Designed to Influence Pending USMCA Talks, Canada PM Carney Says
• Trump’s High-Stakes Bid to Dole Out $100 Billion More in Tax Refunds
• Stung by Trump, America’s Top Trading Partners Shift Gaze to China
• Deadly Winter Storm Disrupts Air Travel, Leaves Hundreds of Thousands Without Power

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Americold Realty Trust, the Atlanta-based real estate investment trust, named Chris Papa as its new chief financial officer, effective Feb. 23. Papa currently serves as chief financial officer at CenterPoint Properties, an industrial real estate firm. He has also held finance chief roles at Post Properties and Liberty Property Trust. Papa will succeed Jay Wells, who has departed the company, Americold said. Wells became CFO in January 2024. Chief Investment Officer Scott Henderson is serving as interim finance chief until Feb. 23.

—Katherine Hamilton contributed to today’s Ledger.

The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.

Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.

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