Coworking spaces increase demand for commercial office space



Commercial property buyers are increasingly looking into the coworking space trend, wherein office space is used more communally. Coworking space operators typically sign a lease with a generic office, then create spaces with numerous desks and other amenities for freelance workers or startups. These spaces are then let at a premium on short, flexible terms to individuals and companies.

“Coworking is upping the game for everybody, and it’s allowing landlords and occupiers to see there’s a whole different service-level offering we should be looking at that goes above and beyond providing space,” Peter Belisle, southwest market director at Jones Lang Lasalle Inc., told the Costar Group. “It’s about focus on the soft services, not just the brick and mortar.”

Coworking spaces are rapidly becoming more mainstream. Blackstone Group L.P. for example, recently signed a deal with a coworking space operator called Industrious to license 1.3 million square feet of space at one of its Los Angeles offices. Already, several businesses have signed contracts to work there, but Industrious said it wants “cohesiveness” in the space.

“This is part of an industry shift away from arms-length leases,” says Jamie Hodari, CEO and cofounder of Industrious. “Part of the reasons why landlords in circumstances like this prefer a management arrangement with an operator like us is that it greatly enhances and expands the scope of what we are able to do for the building.”

Katy Sargent, senior principal and director of workplace practice at architecture and design firm HOK, said coworking is becoming a new kind of amenity.

“Years ago, everybody had a gym, but now it’s coworking,” she said. “What we learned is you can’t just put in a space and say you have it. People go to gyms for the comradery, instructors, and classes, and that’s why corporate gyms aren’t used as much.”

With coworking its more important to create a sense of community, Sargent said. “This absolutely is going to change the way we deliver space, and it’s going to challenge leases as well.”

About Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.

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