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- Coliving Firm Takes Over Units From Struggling Competitors
- The Search For Office Space Becomes More Active
- The Attempt To Aggregate Flex Space Data
- The Future Ecosystem Of Offices
- Digital Trends Transforming The Workplace
- The Tech Industry Anticipates Return To Office
Coliving Firm Takes Over Units From Struggling Competitors
Coliving company Common is taking the struggles the industry has faced over the past year, and using it as an opportunity to expand and grow.
Over the past year, Common has taken over 2,000 units from other properties, and has plans to take over another 1,500 units in the next year. The units from the past year consisted of 1,668 traditional apartments and 473 coliving bedrooms.
At the moment, Amalia Paliobeis, senior managing director of real estate at Common, says the company is managing 5,000 units that are about evenly split between traditional apartments and coliving bedrooms. By the end of June, the company is anticipating to have 8,000 units.
“We’re continuing to grow exponentially, and we have [a] team that’s ready and working with a lot of different owners to take over traditional assets and also coliving assets,” said Paliobeis. “We’re still seeing the aftermath of some of these coliving competitors that have gone under, and we’re still getting those inbound.”
Last week, Common revealed that it had taken over 99 units that came to 239 bedrooms in Washington D.C.’s Union Market neighborhood from coliving competitor Quarters, which recently filed for Chapter 7 bankruptcy.
Quarters investor W5 Group, which purchased a majority stake in the building in 2019, signed a management agreement with Common to manage the units after the bankruptcy filing.
The Search For Office Space Becomes More Active
A recent report from commercial real estate platform Crexi has shown that investors had become more active in their search for office deals in the first quarter of 2021 than they were the previous quarter.
As vaccinations become available to a significant portion of the U.S. population, tenant activity has climbed 42.9% during the same period.
Additionally, asking prices for office assets on Crexi grew for the third consecutive quarter, a 5.13% gain over fourth quarter numbers. However, new inventory added jumped 55.5% compared to the fourth quarter of 2020.
“This number likely represents a significant amount of sublease space, particularly of mid-sized offices as organizations seek a middle ground, where less space is needed overall, but more square footage per employee is needed to keep workspaces distanced,” the report states.
The report saw a variation in growing listings across industries. For instance, medical offices accounted for a large portion (36.9%) of listings in the first quarter, while the amount of flex space for least increased by 29.7%.
The Attempt To Aggregate Flex Space Data
The relevance of flexible offices and coworking spaces has never been more evident than in today’s uncertain environment. Thanks to short-term, flexible leases, companies are able to find a work arrangement without taking on the long-term risk.
However, while landlords and brokers see these spaces as valuable to a wider purpose, it’s difficult to quantify the value of these industries. But why?
One of the most obvious reasons is that there is little to no reliable source for industry data. Because much leasing information remains private, the public has to rely on the word of landlords and management companies to provide specific numbers.
While some companies have been able to aggregate this information from hotels, there is still none that does the same for the flexible office industry. Since there is no platform that is home to relevant data, such as local lease prices, vacancy rates and amenities, it’s hard to evaluate what the risks and benefits are for flex spaces.
However, there are some companies that are giving it a go. For example, CoworkIntel is attempting to compile publicly available information on coworking and flexible offices, then allow users to view anonymized data in return for additional data about their spaces.
“Landlords and lenders are interested in the space but they are sometimes still discovering this new business model,” said Ben Tannenbaum, cofounder of CoworkIntel.
Still, Tannenbaum says that the company needs more than just booking information to flourish — it needs raw revenue data that can then be separated across categories and provide authentic insight into each flex space company’s operations.
The Future Ecosystem Of Offices
By June of 2020, it was estimated that 42% of the U.S. workforce was working from home on a full-time basis. As we slowly transition into the post-pandemic era, the impact these new work arrangements will have on real estate will need to be addressed.
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“Figuring out who will work from home and who will require actual office space, which offices to prune and which to keep, how they will be configured and shared, and precisely where they should be sited,” said Professor Richard Florida in the Harvard Business Review.
Planning these strategies is underway, but what can we expect from the workplace in 2022?
For starters, workplace arrangements will likely fall somewhere in the middle of the spectrum. The hybrid model has gained traction in popularity in recent months as research shows that employees want more options in their work environment.
And it seems that leaders are taking note. A Colliers International survey showed that 86% of decision-makers are allowing employees to work from home one to four days each week.
This means that offices are not going anywhere, but they will serve a new purpose in the future. Moving forward, it is expected that the office will become more of a corporate center meant for collaboration and connection.
As a result, workspaces will expand beyond a single location — they will become an ecosystem of offices comprising homes, coworking spaces and more, spread across various regions.
Digital Trends Transforming The Workplace
The past year has led to workplace transformation unlike ever before as various industries have been forced to adapt to a pandemic that kept billions of people home.
History has proven that in times of crises, society undergoes massive transformations that forever reshape the landscape of how we live, work and operate on a daily basis.
For the Covid-19 pandemic in particular, the biggest change derived from the converging of three technology trends: automation, data economy and the future of work.
Cloud computing and other forms of automation have gone from being a cost efficient method of workplace operations, to a necessary tool for modernization and simplification. While the past year has driven the pace in which companies adopt these advanced technologies, it now requires improvements to stay on top of the latest innovations.
The data economy has also seen its own transformation, from being viewed as a collateral asset to a high-priority means of durability. Data insights are changing business models, allowing businesses to have a first-hand view of how clients and employees are interacting with companies.
Lastly, the future of work concept that has long been discussed is already here. Because so many professionals had to transition to remote working, the view of workplace arrangements and the tools that are needed for these environments have driven resiliency and the evolution of business models.
The Tech Industry Anticipates Return To Office
A new report from Savills finds that over 50% of technology workers expect to be back in the office by the third quarter of this year.
The survey of over 120 tech companies reveals that businesses are feeling more confident to make concrete return-to-work plans.
“About six months ago, no one was ready to make any decisions whatsoever, because they had no idea when they would come back to the office or what that would look like,” said Peyton Johnson, senior director at Savills.
Office occupancy rates have still varied across cities, with New York City seeing 15.4% of workers return to the office, compared to Dallas seeing 41% of workers return.
However, some New York-based companies are making plans about the future now that they have a better understanding of what both employees and the company itself needs.
One of the most significant needs that has emerged is workplace flexibility, with 95% of respondents saying that flexible and remote working will become more normalized.
Additionally, 58% stated that their employees would be in the office at least three days each week, a clear pivot from the traditional 9 to 5 work week. Still, 61% of companies are unsure of what flexible schedules will look like.
The move to a more distributed workforce also means that companies may need less office space. In fact, 47% said they would need less space, but offices of the future will serve as a hub for collaboration and creativity.Share this article