It was tough to ignore the rapid growth of the flexible office market—aka coworking—before the pandemic. Flexibility was a key selling point back then, and it’s more in demand than ever. These four needs are also helping to fuel coworking demand:
1. Interim solutions: “Coworking spaces will flourish for the next couple of years, and the reason is that companies are still trying to assess what just happened, how much space they really need, and where they need it,” says Soozi Jones Walker, CCIM, president of Commercial Executives Real Estate Services in Las Vegas. Some businesses are apt to turn to coworking space as an interim solution while they figure out space needs.
2. Third-party workspaces: Demand also is coming from people who want or need to get out of their homes for various reasons, such as a lack of adequate workspace, poor internet connectivity, noise and distractions, or the desire for more interaction with others. According to JLL’s 2021 Shaping Human Experience report, 40% of respondents would like the option to work from a thirdparty place, such as a coffee shop or a coworking space.
3. Satellite locations: Most members of SharedSpace, a coworking business founded by Daniel Levison, CCIM, are entrepreneurs and small businesses that want professional workspaces and reliable internet. Some businesses are looking for satellite locations to give employees living in the suburbs an alternative workplace or meeting option for teams without having to come to the main office, especially if their main office is in a large urban area. “We are seeing more larger companies taking space, which we think is primarily because of this hub-and-spoke concept,” Levison says.
4. Repositioning of space: In some cases, coworking is still viewed as a viable option to reposition surplus or underutilized space. For example, Hudson Bay Company announced it was partnering with WeWork in the launch of SaksWorks. The new venture will deliver amenities at select department store locations that include work and meeting spaces, café and restaurant space, retail areas, and fitness studios for its members.
To compete with home offices, coworking facilities need to offer great technology capabilities. They also need to provide flexibility, such as the ability to occupy a private office one day and work in a collaborative area another day, Walker says.
The shift to remote and hybrid working is creating challenges and opportunities. And space providers, both landlords and third-party firms, will need to adapt their space, services, and amenities to attract a workforce in flux.
Editor’s note: This article was adapted from “Coworking’s Next Act,” which appeared in the Winter 2022 issue of Commercial Investment Real Estate.