As coworking space and flexible offices become a more integral part of office occupancy, their models are beginning to change. Now, many traditional offices are offering flexible options such as shorter lease terms and better service offerings. With this, coworking has become a more established part of the commercial real estate industry.
Ron Zappile, VP, consulting, corporate solutions of Colliers International said that increased interest in flexible workspaces can be attributed to more flexibility and cost-effectiveness.
“Also, according to the research in our US Flexible Workspaces Report, the average ratio of annual flexible workspace fee to conventional office rents is 3.2:1,” said Zappile. “It is lowest in high-rent cities at 3:1 and greatest in low-rent cities at 5.8:1.”
When flexible workspaces came onto the scene, they were geared towards startups and gig workers, but now many operators are focusing on corporations.
Stephen Newbold, national director of office research for Colliers International, said that this is most likely due to operators seeking diverse revenues and wanting to continue profitability during an economic downturn.
It also allows operators to attract talent in urban centers, as well as giving large companies to scale from short-term projects without needing a lease.
Firms are using shared space in multiple different ways to reap as many benefits as possible. Having access to flexibility, reduced capital expenditures, and a creative environment is attractive to any business looking to diversify their portfolios. Being able to tap into the startup community can also give corporations a chance to learn from their way of thinking, and maybe even invest in them.
Now, many traditional owners are responding to this expansion with their own spaces and lease options. This includes joint ventures, management agreement, and shared revenue models that, in general, gives them a slice of the pie.