In case you were unaware, Covid changed a lot of things. It is unlikely that we will ever again experience such a sudden change to the way that we conduct business or live our lives. However, new innovations and adaptations have been forced into the forefront of commercial real estate as the result of new worker demands. Of particular note has been the growth in popularity of coworking spaces.
The Rise of Coworking Spaces
Coworking spaces aren’t a new phenomenon. They actually date back to the mid-2000s as technological advancements offered the potential for new lifestyles, like the digital nomad. Through the pandemic, workers around the world were forced to adapt to remote operations, and as work preferences have changed, more and more offices have closed completely.
For some, this new standard is welcome, but others have missed the camaraderie and social stimulation that comes from working in an office. It has been with these conditions in place that coworking spaces have seen a renaissance. But what exactly is a coworking space?
In coworking spaces, workers pay for memberships to work alongside other independent members, usually from different fields (eg. freelancers, entrepreneurs, artists, etc.). Coworking spaces are similar to offices in many ways, offering similar amenities such as printers, conference rooms, and basic wifi. However, there is also a great deal of flexibility which coworking spaces afford.
Some of these spaces are modeled around an open floor design, with more social prospective members in mind, while others focus on dividing their floor space into smaller private rooms to offer areas for intense focus. While many are industry agnostic, some focus on providing for unique needs tailored for one particular industry popular in their area. The possibilities for coworking spaces are seemingly endless, which is what makes this commercial property such an exciting one to participate in. With this flexibility, there are many considerations that property owners interested in this trend need to take into account as well.
Coworking Space Considerations
According to JLL, while a relatively small percentage of office space is currently taken up by third-party flexible space providers, this market share is predicted to expand to 30% by 2030. Clearly, coworking spaces are a trend worth tracking, but what unique struggles should property owners consider with this style of office space?
While owners of office spaces might be seeing a drop in demand, coworking spaces need similar amenities, though some differences include a demand for restroom upgrades and expansions, due to a more varied clientele, and improved HVAC. Overall designs tend to be much denser as well, with customer capacity at a premium and an overall desire to promote cross-industry collaboration in these spaces. In addition, standard lease-lengths tend to be shorter in coworking spaces than in traditional office space agreements.
To capitalize on the demands of the modern worker, property owners need to follow these current trends in order to limit their vacancies and take advantage of potential leasing opportunities. Coworking spaces offer the freedom, flexibility, and collaborative opportunities that modern workers crave, and therefore have the potential to become a force in the commercial real estate industry moving forward.
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