Commercial Investment Real Estate March/April 2013 - Page 22

TECHNOLOGY SOLUTIONS o by Dennis LaMantia Onward Coworking in Chicago’s West Loop has the look and feel of a company that would rank as a best place to work: loft ceilings, exposed brick, a skyline view from the rooftop deck, and on-site happy hours. But most of the people there don’t work for Onward. They’re entrepreneurs, freelancers, telecommuters, and other professionals working outside the traditional offi ce environment. They’re coworking. Coworking is renting shared of ce space — a workstation, of ce, or conference room — on an hourly, daily, weekly, or monthly basis. It’s part of the broader sharing econ- omy, where technology helps connect peo- ple with things not commonly shared with strangers — their cars, houses, tools, and even dogs. Commercial real estate brokers aren’t los- ing million-dollar deals to coworking facili- ties, but the trend could impact the industry in a few ways. next big innovation is turning many would- be of ce workers into CEOs of their own startups. T ey’re also looking for cheap space. “About 75 to 80 percent of the people who use our coworking space are entrepreneurs who lef a job to start their own business,” says Aron Susman, co-founder of T eSquareFoot, a coworking booking site. “T ey’re looking Potential Impact T e changing makeup of the workforce is reducing the amount of of ce space busi- nesses require. In a 2012 study, Norm Miller, professor at the University of San Diego’s Burnham-Moores Center for Real Estate, noted that of ce utilization rates were roughly 180 sf to 220 sf per worker. In f ve years, that number is expected to decrease to 100 sf, according to a 2012 CoreNet Global survey of corporate real estate executives. As a result, of ce tenants may factor in alterna- tive work arrangements such as coworking when calculating their space requirement. Tenant advisers can suggest coworking to potential clients who are starting new businesses. Renting coworking space frees Services More spaces like Onward are popping up across the globe. From 2011 to 2012, there was a 93 percent increase in coworking spaces, according to Deskmag, an online magazine that covers coworking. Several economic factors are making coworking more common. Businesses are cutting costs by shrinking their of ce foot- print, especially in urban areas. T ey’re using a more nimble workforce consisting of tele- commuting full-time workers and remote freelancers. In addition, barriers to becom- ing a tech entrepreneur are lower than ever. T e possibility of striking IPO gold on the 20 March | April | 2013 Commercial Investment Real Estate Coexisting With Coworking to get out of the house and add a social, col- laborative element to their day.” Coworking is suited for businesses or indi- viduals who are overserved by traditional commercial real estate brokers and leasing arrangements, but underserved by hunting for space themselves. Most coworking takes place at dedicated coworking facilities, but businesses with open of ces, cubes, or con- ference rooms can also rent their space on booking websites. (See table.)