The future of workspace?
By: J. David Chapman/December 29, 2016
As an owner and property manager of small office buildings, I have noticed an interesting trend in office space use for commercial real estate investors and building owners. I have written about the new sharing economy and companies such as Uber and Airbnb in the past and the effect they are having on commercial real estate.
Another sharing-economy concept is showing up as shared workspace and known as co-working centers. Executive suite arrangements have been around for years and have provided managers and salespeople with a private office and access to amenities needed to conduct their business without signing a long-term lease, paying a security deposit, and contracting for furniture, telephones, internet service, and equipment. Today, the shared office movement around the country is skyrocketing, thanks in part to a new concept called co-working. Co-working centers take the executive office concept to a new level and is finding a very successful niche in the office space market.
Co-working centers differ from executive office suites in two very important ways: culture and community. The tenants are called members and rent space in a plug-and-play communal workspace environment where individuals share similar interests, participate in educational opportunities, share ideas, and network in an effort to reinforce a sense of belonging and building community. The workspace ranges from a desk to a private office and can be rented by the hour, day, month, or year.
Data collected for the last five years shows that the growth of independent contractors in the workforce outpaced full-time employees. With the complexity of employment law and benefit management, this is expected to continue to increase. Millennial workers are now the driving force behind this shift and refer to themselves as freelancers. They prefer offices with an open floor plan, can do business digitally from just about anywhere, and are more willing to share workspace than previous generations. They also place a premium on visual communications when conducting business.
The large corner office that baby boomers once coveted is no longer the desired space for today’s workforce. Recognition of this trend in co-working environments will allow these freelancers to have a place to work other than their kitchens or neighborhood coffee shops, and provides an interesting opportunity for our local real estate investors and developers.
Dr. J. David Chapman is an associate professor of finance and real estate at the University of Central Oklahoma (jchapman7@uco.edu).