The Growing Trend of Co-Working Space
The global trend of co-working space has grown exponentially over the past few years. As a big segment in the real estate start-up industry, thousands of operators have set up such offices across the globe. Co-working spaces offer small companies, including startups, single entrepreneurs and freelancers, the possibility to work in fully equipped office spaces or in shared open space, with lower costs than setting up private offices. They also offer the flexibility of short-term contracts.
Benefits of Co-Working Spaces
In general, co-working facilities provide the needed office furnishings and include the expenses of all the relevant utilities and insurances. Initially, companies in their start-up phases are allocating their resources to building their businesses. Therefore, the time saved on bureaucracy as well as saved finances turn co-working spaces into a winning option. As the businesses progress, they can scale up their operational team size as needed within the co-working space, while enjoying the amenities of conference rooms, and communal areas.
Beyond the lower costs and rental period flexibility, there are other reasons why co-working spaces have become highly attractive. Many of them are located in central locations and even provide utilization of additional franchise facilities in different areas. An added perk of working out of co-working spaces is the access to a network of other entrepreneurs and businesses. This allows for the potential to meet mentors, partners, clients and freelancers to assist on various projects. Furthermore, the interaction with a range of diverse people in co-working environments creates a great social ecosystem and healthier work-life balance.
An interesting phenomenon is the fact that big companies have also started to buy into the co-working trend. From their employees’ perspectives, the appeal is quite clear. There is a younger and more energetic vibe working alongside startups in an environment of office space with non-corporate features. The big companies’ management view the diversification of implanting teams into co-working spaces as an act that will take corporate employees out of their comfort zone. This, in turn, fuels production and increases levels of innovation.
What WeWork Does Right
The pioneering New York-based co-working space WeWork, valued at $17 billion, leads this revolution with shared workspaces for startups, leveraged by a very well-managed community. Members can now enjoy the expanse of WeWork’s 181 office spaces in 47 cities around the world. As part of the company’s business model, they do not typically purchase real estate but rather rent large spaces at a wholesale rate and sublease to smaller tenants at a considerable profit. WeWork intends to have 376 office locations by the end of 2018.
As more companies have rushed to enter the industry based upon the same WeWork style business model, entrepreneurs are introducing new and creative rental style models, including service offerings. Today, in major cities, there will be a range of co-working spaces ranging from low-end conference room rental by the hour to fully fledged corporate style lavish offices that include concierge services.
What the Future Holds
However, the future of the business is set to pivot in multiple verticals within the real estate industry far beyond workspaces. It now converges on commercial and residential real estate as well. Commercial pop-up zones, where businesses selling consumer products can rent space for a season, are now starting to appear on the market. Additionally, as e-commerce strengthens, which affects the brick-and-mortar market, we are going to witness more changes to come. On the residential side, WeWork has launched WeLive, a co-living operation for fully furnished apartments with short-term leases. These include fully covered amenities, such as communal activities and facilities. These exciting turns of events will keep those in the real estate industry guessing about what is the next big thing on which to capitalize.