Robyn Baxter is regional leader of consulting for HOK’s Canada practice and works out of the Calgary office. The abridged interview here originally appeared on the website of Building Magazine.
Excerpted from Building Magazine:
How would you define coworking space?
I think the notion of coworking will evolve. It is not a mature industry yet and time will tell how the definition will evolve with it. But currently I think it is that kind of alternative office space where you have some kind of membership to use it.
So membership is key? Is coworking different from the shared business office concept going back to the 1950s?
I think in its current definition membership is the key. I don’t know that the definition will remain that specific as time goes on. But, there is the notion [this membership] means having a place to go to work when you don’t have another place, a place where you have the necessary amenities including the social aspects of work. Currently, that is what is provided in a coworking environment with a membership base. As HOK’s coworking report says, there are even hotels and other places starting to set themselves up to provide these functions. So, I am not sure this definition will remain.
In the traditional shared business space situation, the client company had ownership of specific spaces within that arrangement. There was usually a lease arrangement [and] in shared services I had a specific office that is mine with a locked door. Coworking membership involves no such ownership.
Who’s using coworking spaces today, and are they the same people who were using them when they first came into fashion?
I think that when this all started it was about the small entrepreneur who didn’t want to commit to space but also didn’t want to stay in his/her home every day. He/she wanted to get out and be part of a community and network while also having all the business amenities required. Now I think businesses are considering what their real estate costs are and, of course, we travel much more for work. So the city I am in as a traveling employee may not have a company office. So coworking space has become the alternative to sitting in my hotel room. Coworking spaces are offering alternatives to the corporate traveler.
Corporations are also looking at coworking spaces as a means to manage unexpected growth or short-term expansion of staff volume. I know one company that did a lease arrangement with a coworking space where a big project came on board for the short term and they needed a few more desks. The coworking operation was in a neighboring building, so they used it to respond to this short term use.
What are the most important aspects of a successful coworking space?
Like all real estate, it is about location, location, location. Easy access either through parking or transit is important. Being in a downtown core or business center around a city is important. But the user experience is also central. The reason why people are not working in their hotel rooms or in their homes is because the coworking space better provides desired amenities. It provides the experience they want, which is primarily being part of a community, being able to chat with someone around the coffee machine. So I think [locations] are going to carefully craft what the experience is, and that is what is leading to other diverse kind of spaces.
How could coworking spaces change in the near term?
As costs go up and the population from which they draw becomes larger, spaces will become bigger. I don’t know how interested the big operations will be in putting an operation way out in the burbs, but an entrepreneur may know there is a demand. In Calgary, there are people well out of the downtown who do not want to commute every day and their employers are becoming more flexible in terms of mobile work. These type of workers may be looking for another place to go that is close by and out of the core.
Something I’m also seeing now are landlords and building owners trying to attract different kinds of businesses into their spaces. This is especially the case if you look at what we call the B-class buildings with smaller foot prints or in locations that are not attracting the top-level tenants. The idea of putting a coworking space in the building as an amenity is growing. I think you are going to see more landlords with some type of coworking space that is open both to the businesses in the building and to the public. Concepts like that are going to be competition to more traditional coworking operations. You even see some banks that are putting coworking spaces in their buildings to allow the public to come in as part of the development.
Will there be a major shift in the economics of establishing coworking spaces?
The challenge they face is that real estate leases are 5-10 years long but the memberships in coworking spaces are usually 12 months long. So, they are constantly in a selling mode in a big, big way because people come and go. The long term will tell us whether the model can be sustained. If a city does well, and cities have different environments, and the costs go up, can you afford to do that when you don’t know your long-term income?
Any final takeaway?
Something we are seeing happen is large, large organizations taking the principles of what is working in coworking spaces and trying to recreate them within the company, i.e., that vibe, that atmosphere. Coworking is having an impact on how large corporations think about their own work spaces. Whether they call it their innovation center or something else, we are starting to see corporate spaces that look and act like coworking spaces.