WHY CO-WORKING IS HERE TO STAY | CO-WORKING SPACES
“Coworking space“, as a formal concept in commercial real estate, is not new. In fact, the practice of freelancers and entrepreneurs working side by side in community-based workspaces has been recognized as coworking for almost fifteen years now.
In its latest study on the subject, Colliers International reported that there were only 140 active coworking operators in the United States, covering 19 markets and covering a 27 million square foot workspace. Although this still represents a small portion of all existing office space in commercial real estate, coworking has become an integral part of the commercial real estate industry and “has become an integral part of the space for most companies, big or small. ” and more and more companies enter this space market every day. And while the coworking segment has grown exponentially in the United States in recent years, growth outside the United States has been even more extreme.
The things that have always made coworking spaces (or “flexible work”) so attractive are still relevant. Coworking spaces are conducive to innovation, collaboration, and productivity, and their evolution is creating a new approach to design, “a trend that is catching up among property developers, homeowners, and businesses.” Today, this translates into an overhaul of work environments in general to accomplish a number of things: to adapt to new technologies; be flexible in terms of collaborative spaces but also private workrooms and offices; and to be informal, unique and ergonomic. This new design features greatly appeal to future Generation Y and General Z employees who do not want to be confined to an office or office environment. As a result, the design trend that began in the early coworking environment has now begun to influence regular spaces (non-coworking) as well.
In addition to improved design, coworking offers flexibility in leasing contracts, such as shorter lease agreements, and desirable shared office equipment. If landlords offered short-term leases directly, they would struggle to finance buildings, but using a long-term broker, such as The We Company, solves this problem. Coworking is now common, allowing short term leases for tenants and meeting flexible space needs.
The Co-Working Space Market
Coworking is indeed a global phenomenon that has become its own sub-sector in the office property market. In 2018, there were approximately 14,411 coworking spaces worldwide, representing growth of about 200% over the past five years. More than 10,000 of these spaces (approximately 27 million square feet in total) are in the United States, of which approximately 40% in New York.