Coworking has boomed in the past five years and has grown in popularity, not only among independent workers and startups but also with corporate users as well. As coworking becomes a norm, we expect to see many additives and changes to the co-working space in 2019.
Let’s take a look at a few of the trends we expect to see for coworking in 2019.
Coworking Will Continue to Have an Impact on Commercial Real Estate
Coworking has a major impact on how the commercial real estate industry performs. Coworking operators have delivered a large amount of positive net absorption in major metropolitan markets. Coworking has also encouraged traditional landlords to provide upgrades and increased amenities. Landlords have been investing heavily not only into the structure of the building but also in their communal spaces.
Coworking Spaces Will Expand
Years ago, coworking spaces typically did not exceed 20,000 square feet. In today’s market, it is not rare to see coworking spaces lease over 100,000 square feet, targeting corporations and long-standing businesses. Many large enterprise users like Verizon, Toyota and IBM have realized the benefits of coworking space, proving that outsourced, temporary leasing structures are appealing to companies of all sizes, from corporate users to startups and entrepreneurs.
Increased Focus on Niches
Coworking operators are focusing on niches and finding exponential growth and higher profit margins. By focusing on specific niches, coworking facilities are able to create a community of people that support each other and develop a shared economy. This type of specialization can deliver more access to expertise, industry-specific knowledge and a community of people with similar interests.
Big Corporations are Utilizing Coworking Spaces
Large corporate companies like KPMG, Microsoft, and Toyota are starting to test out using coworking. Some are even looking at funding new co-working ventures. For certain big corporations, entire teams are shifting into coworking offices allowing them better access to education, innovation, and talent with lower initial real estate costs and greater flexibility. According to Recode, companies with more than 1,000 employees now make up 25 percent of WeWork’s annual revenue and WeWork reported that this number increased by 250% in 2017.
Coworking has a Global Reach
Coworking spaces are located in almost every major market in the world. The largest coworking company, IWG, was founded in Belgium but now has a large footprint in the United States. Many other coworking operators have entered markets across the globe, turning this trend into a norm for countries around the world.
Why Coworking Will Remain Popular
As work styles change and new generations enter the workforce, coworking will remain a viable option. Millennials want to work how they want and when they want, which is something coworking spaces can offer. With technology allowing professionals to be more mobile than ever, a traditional office space does not offer the right environment for certain professionals and businesses to be the most productive and efficient. Landlords have even started to partner with coworking operators to include entire floors to attract and retain new tenants.