Major office space provider IWG has started adopting the franchisor model, pioneered by fast-food company McDonald’s, in its effort to edge further away from WeWork.
How does flexible space impact property value?
A recent CBRE report shows an increasing amount of corporate and niche spaces claiming a big portion of the U.S. real estate industry.
The U.S. Property Value Implications of Flexible Space report states, “The niche flexible space segment should continue to mature and expand, potentially boosting its share of Class A office space nationally to as much as 10% by 2028.”
CBRE’s report revealed that most flex transactions had cap rates lower than the national and market averages due to operators locating in active markets and high-quality buildings.
High coworking concentrations also have an impact on property value. About 64% of buildings with over 40% of coworking space had higher cap rates.
The Latest News
Delivered To Your Inbox
Still, there is some risk with incorporating a flex space within buildings. Landlords and investors should be careful and consider their market when deciding how many flex spaces to include in their space.
They should also engage with quality flex space operators in order to increase their income and avoid the risks that come with managing these offices.
Overall, the report summarized that if a building is in a good location and business area, then a moderate amount of flex space will not impact asset values on either end.
Latest on Daily Digest
America’s malls are becoming more and more vacant, but coworking companies are taking advantage of these empty spaces to expand their services in a nonconventional way.
Flexible workspace provider Knotel has once again expanded its presence in central London, signing three new deals across the city totaling 40,000 square feet.
Office Evolution, the nation’s biggest coworking franchisor, will expand its footprint in Mount Pleasant as it continues to cater to small business owners in the area.
Although coworking spaces are often categorized as servicing major cities, tier II cities are having their moment as many startups continue to flood into these areas.
Amy Nelson, CEO of The Riveter, has made it her business to promote inclusivity of women in professional settings while also providing men tools to value gender equality.
A survey of 1,000 WeWork members found that, while some use the space out of convenience, others find the culture to have an effect on their professional identities.
While WeWork is expected to file for an IPO this year, its valuation and recently announced losses have left investors worried about the sustainability of the company.
IWG has started rolling out a franchise model, similar to that of McDonald’s, enlisting franchisees to take the reins in subleasing Regus and Spaces offices to companies.
Chicago-based Novel Coworking has purchased Denver’s 195,753 square foot, 17-story boutique office property Trinity Place in Uptown that is currently 65% leased.