In 2017, coworking is a major trend in office space design. Fueled by a growing population of millennials, remote workers, and freelancers, it’s a movement that is not going away anytime soon.
Office landlords and building owners would do well to see this as an opportunity to serve the workforce of the future – one that eschews the cubicle and opts instead for a more open, flexible environment.
A landlord’s advantages to establishing a coworking environment
As an owner of commercial real estate, you will attract more tenants by offering a flexible office environment that includes a coworking space. Some of these advantages include:
Coworking offers the opportunity for small businesses and startups to get off the ground more quickly
For a new company, the expense of establishing an office is often unrealistic, forcing young startups to work from public places or home offices in order to stay lean. By offering a coworking environment, it gives these companies the opportunity to get started, and once they are established in the building you may be able to offer them more flexible office opportunities as their need arises.
Coworking spaces create positive cash flow more quickly
A coworking environment can house more people and more companies than a standard office space, thereby maximizing your revenue per square foot.
Maintaining a coworking space can help you grow
If the coworking venture is successful, you may consider installing one in multiple locations, creating a sustainable revenue stream and helping grow your bottom line.
High-profile coworking leads to new tenants
The more populated your coworking spaces are, the more potential tenants you will be exposed to, which leads to increased revenue.
Attract Millennials with the coworking flexibility they demand
The millennial workforce demands flexibility, and they tend to shy away from traditional office environments. With a growing millennial workforce, these are the people you are catering to and your future tenants. Fulfill their coworking needs and you will always have their business.
Attract today’s top talent with convenience and ergonomics
Additional amenities like on-site retail, coffee bars, café’s, fitness centers and soft-seating lounges that can double as a workspace can also figure into the larger scheme of things. Mixed-use buildings such as these are in general more desirable to an inner-city workforce, attracting a working clientele that is within walking distance of their residence.
For the office space operator
There are also clear advantages to the office space operator in partnership with a building owner. First, startup costs can potentially be shared, and probably most importantly, it diversifies risk, minimizing the potential for failure and, by proxy, increasing the operator’s chances at obtaining seed financing.
An operator can approach a building or property owner with a proposal for coworking space that offers a split of the profits. If your location is good and your forecasts are accurate, you can promise a very attractive return in contrast to what they might make on standard office space with market-value rent.
If you are willing to foot the entire bill to equip and outfit the coworking environment, you may even be able to negotiate reduced or deferred rent in lieu of the upgrades you are making to their property. Outline the long-term advantages to partnering with you, which should detail the site improvements as well as forecasted financial gains.
Workspace Strategies: taking your office property to new levels of success
Whether you are a landlord or an operator in search of your next conquest, a coworking space can help you achieve profitability and viability. Call today to find out how we can help drive value in today’s competitive market.