Miami’s office market continues to be dependent on coworking firms to fill their spaces, but some landlords are concerned that their absorption rate is becoming too much.
The ever-evolving flexible office market transforms once again
2019 is bound to see further changes in the real estate industry due to increased consolidation, institutional capital, and dealings with building owners.
With the massive amount of competition, some are estimating that 5 to 10 percent of businesses will either go out of business or be acquired at the end of the year.
Large players with the proper connections will have the opportunity to grab market shares as the economic future remains uncertain. Smaller niche businesses, such as coworking operators The Wing and Neuehouse, may find it hard to budge on consolidation agreements without deals that align with their personal brand.
Landlords are also expected to become more valued assets as they make the decision whether to buy, partner or build flexible spaces to bring in new tenants.
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While any of these options have a chance of success, landlords would have the most trouble opening their own flexible space due to time, cost, and lack of product knowledge. The coworking sector is constantly evolving and now more than ever, tenants are seeking out to find a spot that fully meets their needs.
Additionally, we can expect to see coworking further merge with hospitality, retail and co-living services. Hospitality was the key player in services last year, and it is anticipated to continue playing a big role in the shared office sector.
Commodities including product and service enhancements are going to become essential for any player to survive in this highly competitive sector.
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