An Update to Our Research Into Coworking for the Corporate Real Estate Executive As outlined in "Coworking: What CRE Leaders Need to Know," (originally published in the March 2017 issue of LEADER magazine), coworking is heavily susceptible to market conditions as the industry faces mounting competition, a volatile tenant base, few barriers to entry and looming lease increases.
MakeOffices, another industry giant, operates three Chicago coworking centers that add up to 160,000 square feet. For some, these large environments have lost the boutique feel and sense of community that was so appealing in the first place. (Download HOK and CoreNet Global’s Coworking Research Report.)
Just in the past several months, we’ve seen coworking continue to evolve and expand into new business models and settings. Developers, for example, are starting to allocate space within their buildings to serve as community/coworking environments. These spaces are seen as a shared amenity that attracts and connects tenants, just as fitness centers once did.
And considering that more than half of coworking occupants are now employees of a company, corporations are rethinking their strategies. For some, coworking enables them to commit to less permanent space. Others use it as overflow space to meet changing staffing needs. But more and more companies, including Capital One, Google, Microsoft and AT&T, are looking to replicate the coworking experience within their own space. (See Verizon example below.) The rise of the creative offices and maker spaces, coupled with the introduction of community managers to service the corporate space needs, is bringing a new wave of competition to coworking environments.
We’re also seeing coworking go from being small, community hotspots to “big box” environments. As BisNow recently reported, in Chicago alone WeWork operates five coworking centers spanning 356,000 square feet.
Teach For America, New York, New York
48 | hok.com