Will Shared Working Space Disrupt Traditional Office Leasing?
In the now seemingly distant past, all work was about leaving your home and going to your office. Then the digital revolution changed that and gave people the opportunity to work within the comfort of their homes. Even startups that evolve into the leading companies of the world start from the homes of their CEOs.
The startup and freelancer mode of work hasn’t yet managed to dominate the working sphere, and we already have another trend that’s gaining in popularity and influence – the shared working space. Only a decade ago, shared offices were practically unheard of, and now we’re discussing their effect on the very existence of traditional offices.
But how much of an influence does this mode of work have? And more importantly, is it disrupting traditional office leasing?
The Prevalence of Shared Working Space
Let’s look at the numbers first. Major world cities are seeing significant increases in shared workspaces. Cities like New York and London are seeing a 20% yearly increase of coworking spaces.
In the US, in only the past two years, shared workspaces have claimed around 30% of all offices. As for the entire globe, the shared office space industry has grown by more than 200% in only five years.
Companies that lease shared offices are among the fastest growing companies in the world at the moment. WeWork is now a well-known company, and their expansion is numbered in over a million square feet of office space every year.
The numbers are precise and show real and unlimited growth of this relatively new industry. Two things mostly enable the growth:
the popularity of shared offices among the younger generations
the significantly lower cost of building modern shared work spaces when compared to traditional offices
The popularity of shared offices stems from several reasons which are unlikely to change soon. Freelancers and tech companies have a great need for such offices, and their needs are unlikely to alter. Moreover, people today increasingly like the collaboration that’s intrinsic within shared offices. In the end, these offices are flexible, efficient, and very productive, which makes them perfect for a vast majority of younger people.
How Much Will Shared Workspaces Affect Traditional Office Leasing?
This significant increase is the clearest indicator of how much it has the potential to influence traditional office leasing.
Yes, it is true that office leasing has fallen in numbers, and yes, much of this decline is affected by the expansion of shared spaces. However, these numbers are still not high enough to change the entire industry of office leasing.
It’s important for commercial real estate owners to take note of this growing market as it will inevitably affect their business a lot more in the coming years. It is essential in cities where tech companies are becoming more prevalent. If you are to continue being successful in this business, it’s vital for you to start looking into diversifying into this fast-growing market.