Yardi Director Of Coworking Predicts A Revolution

• The coworking industry is shifting to meet the growing demand for flexibility in office spaces, with a significant portion expected to adapt to flexible arrangements.
• Will Sandford, Director of Coworking at Yardi, spoke about the importance of building long-term relationships with enterprise clients, as they contribute significantly more revenue compared to individual users.
• Despite the growth of flexible solutions, the marketplace faces inefficiencies that hinder accessibility, necessitating alignment between offerings and user demands for a seamless coworking experience.
  

This article is based on the Allwork.Space Future of Work Podcast episode featuring Will Sandford, a veteran in commercial real estate and coworking, currently serving as the Director of Coworking at Yardi. Click here to listen to the full episode.

In the future, 30% of office space is projected to transition to flexible arrangements. 

Will Sandford, Director of Coworking at Yardi, revealed to Allwork.Space that the future of coworking is not just about shared desks, but about strategically adapting to the progressing demands of enterprises. 

In our recent podcast conversation, Sandford, a seasoned expert in commercial real estate and coworking, shared his insights on the burgeoning need for flexibility in office environments, underscoring how coworking has emerged as a vital adjunct to traditional office spaces. 

Growth of Coworking as an Adjacent Opportunity

Sandford articulated the profound impact of understanding customer needs and identifying adjacent opportunities in the coworking space. Since 2017, Yardi has recognized the coworking segment as a vital complement to traditional office spaces. 

The industry, as Sandford noted, has faced challenges — particularly in the wake of the pandemic. Observing declining occupancy rates and shifting usage patterns has underscored the necessity for transformation. 

Data-driven insights have become crucial, revealing the stark contrast between optimistic predictions from leaders — such as KPMG’s assertion that 80%+ of CEOs believed in a full return to office — and the reality reflected in Avison Young’s recent report, which suggested a significant portion of office stock would pivot to flexible arrangements.

A Marketplace in Transition

As coworking spaces proliferate, Yardi’s data team is meticulously tracking over 7,100 U.S. coworking facilities, generating substantial insights into market trends. The rise of flexible office solutions highlights a critical trend: the increasing presence of enterprise clients. 

Sandford emphasized the importance of larger, long-term relationships with high-caliber clients, which has emerged as a crucial factor for coworking operators aiming to secure sustained profitability.

A notable concept that was discussed was the idea that coworking operators are not merely offering real estate, but rather providing “portfolio insurance” for enterprises. This acknowledges the transforming nature of work and the need for adaptability in real estate solutions. 

The past challenges of large-scale coworking spaces have completely changed, with institutions now viewing expansive coworking environments as viable options for enhancing their real estate strategies.

“There is a huge opportunity for companies to reduce real estate spend and either move that into flexible benefit programs or return it to employees,” Sandford said.

The Imperative for Accessibility

Sandford posited two essential tenets driving the future of coworking: “flex everywhere” and “flex anywhere.” The former emphasizes the necessity for flexible office solutions to be available across diverse geographical and socio-economic landscapes, ensuring that they cater to varied customer needs. The latter focuses on accessibility — ensuring that users can seamlessly discover and utilize available coworking spaces.

He also addressed the marketplace’s inefficiencies. While the growth of flexible office solutions is evident, ensuring that customers can access these spaces remains a pressing challenge. 

“The biggest challenge is the efficiency of the marketplace,” he said. 

Sandford emphasized the importance of aligning operator offerings with user demands to create a cohesive ecosystem that promotes fluidity and efficiency in accessing coworking spaces.

The Enterprise Advantage

One of the most compelling aspects of the podcast discussion centered on the enterprise market’s role in shaping the future of coworking. 

Sandford pointed out that enterprise clients typically contribute significantly more per booking — up to 40% more — compared to individual users. 

This lucrative potential underscores the need for coworking spaces to cater to enterprise demands, creating a symbiotic relationship that benefits both operators and large organizations.

He also explained how various sectors, even those traditionally perceived as conservative, are beginning to recognize the advantages of flexible office arrangements. 

Companies like Verizon have pioneered the exploration of optimized real estate strategies, challenging the notion that only tech-centric firms benefit from flexible spaces.

A Positive Outlook for Coworking

Sandford shared an optimistic perspective on the coworking industry’s trajectory. Institutional operators are increasingly adopting flexible solutions, acknowledging their role in maintaining tenant relationships and enhancing property value. 

By integrating coworking offerings into their portfolios, operators can better serve tenants and create diverse operational models that meet evolving market demands.

Yardi’s commitment to the coworking sector is evident through its investments in technology, operations, and marketplace solutions. 

By cultivating collaboration among various participants in the coworking ecosystem, Yardi aims to elevate the segment’s profile and viability in the long term.