Why is Everyone So Excited About “Co-Work” Space?
Tanner Laverty / January 26, 2018
“Shared” office space is an emerging trend in commercial real estate. Although the Sacramento market is lagging behind, in the Bay Area and Los Angeles, “co-work” office space is everywhere. In fact, this article lists the top 40, co-work spaces in the Bay Area. Who knew there were so many?
“Co-work” space or “shared” office space can be configured in a variety of ways, but the commonality is the offering of shared resources that a smaller office tenant would not regularly have. From conference rooms and break areas in most, to bars and gyms in some, one of the greatest draws of co-work space is the access to these amenities. Small office users typically cannot afford (and rarely would pay for, if they can afford them) these features for occasional use, but the shared office concept makes their occasional use affordable.
Additionally, the “feel” of the space can contribute to productivity. Specialized co-work space may create opportunity to collaborate with other industry “experts”. And productivity can also increase for those who “work from home” but are not successful actually working at home. (If you are easily distracted by the dishes in the sink, co-work space might be for you.) Finally, the sense of community in shared office space it appealing to many, and companies like WeWork, reinforce this with billiard and ping pong tables in their space, and by offering happy hours and other organized social activities.
So, will the trend last?
Although a few co-work spaces existed previously (think Regus), growth of this concept has been prevalent for the past decade. Now, according to an article in Forbes magazine, there are over 11,000, and more than 26,000 anticipated co-work spaces in the U.S. by 2020. In fact, this trend toward “experiential” use is growing in the industrial and retail markets as well. Users are looking for an experience, not just a typical office (industrial or retail) use. On the other hand, the typical user (so far) of co-work space is the young entrepreneur or transient user (think sales person who spends as much time out in the field as in any office), and these will be the first to let the space go in a downturn.
The concept of co-work space is exciting and new, and it’s growth pace reflects that. But, like any other trend, it will slow. There will always be users who need to “shut their doors”, who need privacy over community and whose productivity is affected more by these things. These needs will balance out, and I expect shared space to equal traditional office space in major metropolitan areas in the future.
If you own investment property and are interested in exploring how this, and other trends, can affect your investment in the future, call Laverty Chacón today, at (916) 722-0333, or email me at firstname.lastname@example.org.
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