By Shantanu Mohan
June 21, 2018
Adapted from: naiop.org
Coworking centers and executive suite facilities have become one of the hottest trends among tech startups, freelancers, and creative types seeking community and collaboration with like-minded entrepreneurs. These shared office spaces operate as temporary work hubs that anyone can rent by the hour, day or month. Each is as diverse as the people who frequent it.
Executive suites are fully furnished offices and other types of workspaces that are typically leased on a pay-as-you-go basis. They enable individuals or companies to occupy office space without signing a long-term lease, paying a security deposit, leasing equipment or contracting for telephone, Internet and other services.
Coworking centers differ from executive suites in two important ways: culture and community. Coworking center members who rent plug-and-play communal space typically have similar interests, participate in educational opportunities, share ideas and socialize during events such as happy hours to reinforce a sense of belonging.
Coworking’s spike in popularity mirrors the rise of the nation’s independent workforce, now 30 million strong, with 17.8 million clocking in full time, according to data from MBO Partners. Behind this explosive growth are new technologies that enable today’s highly mobile workforce to conduct business remotely and the freedom to collaborate anywhere, any time using tools such as Yammer, Jiveand Huddle. Corporate downsizing, employee dissatisfaction with traditional jobs, long commutes and new online marketplaces that make matching companies with freelance talent easier and more cost-effective are also fueling workers’ drive for independence.
Millennial workers between the ages of 18 and 34 are now the driving force behind the freelance economy in the U.S. According to research by Coldwell Banker Commercial Affiliates, 63 percent of these “digital natives” are as comfortable working from a mobile device as they are at a desktop computer. They value autonomy, prefer offices with an open floor plan and are more willing than earlier generations to share their workspace with someone else.
This generational shift in the use of physical space has vast implications for the real estate owners, developers and designers who are acquiring, retrofitting and outfitting the office buildings of the future. When workers can connect with colleagues as nimbly across the world as they can across a hallway, and no longer have one fixed office but rather thousands they can quickly and affordably access around the globe, what role should commercial real estate play in an increasingly virtual, hyper-connected world? The industry is discovering that the big corner office baby boomers once coveted is suddenly morphing into an entirely new product.
Shared office spaces are also converging with residential real estate aimed at meeting millennials’ combined needs for social/work hubs, affordable housing and amenities that enhance their well-being. Traditionally slow to change, the commercial real estate industry is gradually shifting from being a space provider to creating experience and community for the next generation. The future of office workspaces will belong to owners and developers who not only understand and can weather the market’s vagaries, but who also respond to their tenants’ nascent work and lifestyle needs by creating diverse, dynamic places that inspire people to perform their best and live life to the fullest.