Coworking: A Corporate Real Estate Perspective
HOK’s WorkPlace practice and the UK Chapter of CoreNet Global have released a new report examining the impact of coworking from a corporate real estate perspective.
Coworking is one of the fastest-growing sectors of the commercial real estate market. The report, Coworking: A Corporate Real Estate Perspective, examines the drivers of coworking from the demand and supply side, the industry risks and implications for corporate real estate, as well as information about the owners, coworkers and centers.
Changing business priorities and the need to attract talented people, reduce real estate costs, improve speed to innovation and increase productivity are driving corporations to consider different workplace models, including on- and off-site coworking.
“Though coworking space makes up less than one percent of the world’s office space, it represents an important workforce trend and highlights the strong desire of today’s employees for workplace choices, community and flexibility,” said Kay Sargent, ASID, IIDA, CID, LEED AP, MCR.w, director of WorkPlace at HOK. “Driven by demand factors, including next-generation work styles and the desire for real estate portfolio agility, C-suite executives from human resources, operations, real estate and finance are increasingly interested in learning how coworking affects their work practices and policies—and how they need to design, manage and operate their workplaces.”
Other key findings from the Coworking report:
- The coworking concept is evolving to comprise accelerators, incubators and maker spaces. It reaches beyond office settings to include college campuses, retail locations, hotels and libraries.
- The impact of coworking spaces on CRE includes providing fresh uses for older properties and for underutilized spaces in existing facilities.
- The lowest engagement levels are found in employees who never work remotely. The highest employee engagement levels occur among those who work remotely less than 20 percent of the time.
- Many coworking centers emerged in a time of high unemployment and low rents. But 54 percent of the current coworkers will leave a specific location in less than a year. This high turnover and tenant instability challenge coworking centers to maintain profitability. They are vulnerable to market conditions and new competitors.
“For corporate occupiers and real estate professionals, the coworking trend is worth watching, exploring and testing,” said Curtis Knapp, HOK’s director of consulting. “Coworking can be used to add flexibility to a portfolio and to help align space with the ebbs and flows of supply and demand. It is one potential solution to the challenges posed by the changing nature of work and workers.”
“Our workplace community is a highly interactive forum where ideas, research and results are developed and shared,” added Philip Cohen, president of CoreNet Global’s UK Chapter. “Our aim is to demonstrate how the workplace can influence major business issues and equip members with the knowledge to bring about change. This report is testament to our ethos and provides members of our UK Chapter with valuable industry knowledge on the latest themes and trends.”