Since it’s first debut in 2005, the concept of co-working has been disrupting the traditional office real estate market. What started as a niche idea is now completely re-envisioning the way offices function.
Throughout the last decade, the popularity of co-working office spaces has exploded all over the globe, going from a mere 160 flexible offices in 2008 to nearly 19,000 in 2018. The latest stats call coworking ‘the new normal’, and predict that there will be almost 4 million coworking members by 2020. This unconventional work method has taken a quantum leap, demonstrating its unwavering precedence in the new era of business.
2018 was the year that the CRE world finally starting paying serious attention to co-working. With CRE moving into the flexible workspace industry, it continues to influence the way co-working office spaces operate.
CRE’s redesigning of the business model can be observed on all fronts, especially negotiations and agreements. Get an insider's view by looking at these 3 major ways CRE is moving into co-working.
Property Owners Marketing as Coworking Brands
It’s no secret that the flexible workspace module is the most sought after design for office spaces. For all companies big and small, the demand to occupy a coworking space is rampant. When property owners saw this shifting of interest, they decided to make strategic moves in order to stay relevant.
Their solution was to begin marketing as ‘flexible workspace brands’, adding coworking into their deck of cards. Surveys show that flexible office spaces have benefitted 72% of landowners by dramatically increasing the property value.
Brokers Getting In On the Action
The increased popularity of flexible workspaces hasn’t slipped under the radar of brokerages and real estate companies, who are eager to jump into this hot market. Brokerages can be observed creating coworking brands to specially assist in landing the perfect office space. This is a strong movement for the CRE world, which is expanding into a whole new facet to fit this trend.
Specialty Built Coworking Spaces
Flexible workspaces have seeped into the construction and renovation phases of property management, leading to a whole new type of building design. In order to further benefit from this market trend, landlords and property owners are open to custom building coworking spaces for interested occupants.
They inquire about the needs, wants, and circumstances of the occupants looking to cowork, and from there, they create their ideal flexible office space. This is a creative method that allows operators to shape their own coworking grounds, and also helps seal the business deal for the property developers.
A New Type of Agreement
With CRE interested in coworking, management agreements are becoming nearly as flexible as the office spaces. Operators are negotiating terms that allow them to enter into an agreement with the property owners, on the grounds that they will take care of the building and carry out its basic functions in line with their company goals.
In turn, the property owner receives a percentage of their earnings. This agreement is far more casual than a fully-binding lease and protects occupants from being tied down in case of an economic discrepancy.
Coworking is becoming the new standard for office spaces around the world. With CRE’s investment in the concept, it will only continue to reshape the way businesses function. Click here to learn more about entering into this worldwide platform with NAI Global.