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.
Coworking Firms Hit By Recession Could Affect The Broader Market
WeWork, New York City’s largest renter of commercial space, may add extra risk for landlords when the next economic downturn hits as almost $3.1 billion of commercial mortgage debts has direct exposure to the company.
In previous years, despite the financial crisis hurting the residential real estate market, office markets held up well. S&P Ratings found that the market has strengthened since the crisis, with commercial vacancy dropping to 12.6% from its 16.5%.
Now, coworking spaces are at risk of losing their memberships in the face of recession and could see competition from established property companies.
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S&P anticipates that coworking tenants will create big risks for landlords and investors in commercial mortgage debt. Additionally, there could be a conflict of interest between landlords and coworking lessees.
Such risks are relevant to investors due to coworking operators being such large tenants. If these firms are hit by a recession, it could cause the broader real estate market to take a tumble.
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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.