CoWorking continues to generate headlines as industry leader WeWork has gone from zero to a $20 billion valuation in just eight years. Its membership doubled from 2016-17 and is expected to double again from 2017-18. Is is possible for an office provider to amass so much value without owning property? Consider Uber, ($72B) a taxi company that has created its value without owning taxis; AirBnb, ($31B) a lodging company that has done the same without the benefit of hotel ownership; and of course Amazon, ($900B) which started as a retailer without stores or inventory. Maybe there is something behind that valuation.
My entire professional career has revolved around office space. I have researched the office market, represented clients in leasing office space, and acquired, developed, sold, and leased office buildings. Throughout this time, I always worked out of a traditional office space…until now.
The new generation of coworking centers led by WeWork is challenging the way we think about the workplace. The rise of new startups and growth in the media, entertainment and technology sectors has spurred the growth of new communities of entrepreneurs and creative professionals who want to be part of something larger. It is the millennial generation that is driving the change, but industry veterans like myself have also been swept up by the co-working wave.
Corporate America has also taken notice. Over 22 percent of the Fortune 500 are now WeWork members. Although co-working was initially created for the 1 to 2 person office, we are seeing enterprise solutions where companies have hundreds of corporate employees at a single co-working location. Microsoft and Royal Caribbean both have major operations operating out of WeWork locations in Miami.
While WeWork is getting all the press, local and regional operators such as Buro, Pipeline and Serendipity Labs are providing solid competition. Meanwhile, Regus, the leader in co-working until WeWork totally disrupted the sector, has responded with its new concept, Spaces, with its first South Florida location in Fort Lauderdale set to open later this year.
Regus, along with it’s traditional executive suite competitors like OfficeEdge and Quest continue to thrive by focusing on providing ancillary services to tenants.
Miami, with its unique multicultural community and ties to Latin America and the Caribbean has developed a vibrant startup ecosystem which makes it a key target market for co-working facilities. While co-working accounts for 1.5 percent of office space in the U.S. Miami is the national leader with a full 3 percent of its space dedicated to co-working.
Shortly after joining Truss, I leased a co-working space at Pipeline in Downtown Fort Lauderdale. I have a small glass enclosed office which is ample for my needs. It is an interior space, but there is plenty of natural light due to the glass partitions throughout. I have a great tenth floor view of Downtown Fort Lauderdale. While the true ocean views are a few floors higher, I can occasionally see specks of blue water. I also get 10 hours of conference room use per month, the use of a fully equipped kitchen and lounge, and all the coffee I can drink. I’ve got a laptop and Pipeline’s strong wi-fi signal, so I can work in my office, the lounge or in an Adirondack chair in the break area.
I wasn’t sure if Pipeline was the right thing for a lifelong traditional office user, but I have to admit that I really enjoy my new home away from home and officially consider myself a co-working convert. Stay tuned to KensTrends as we continue to explore the coworking revolution.
So how does the cost of co-working compare to a traditional office space? That’s a great question – I’m so glad you asked. That will be the subject of a future blog article. But for now a future blog article. But for now, there is an app for that. You can find it at truss.co. (Did you really I think you would get through this article without a pitch?) Our platform is the fastest, easiest way for small businesses to find their ideal office space with the help of artificial intelligence and virtual reality. We provide true price transparency so you can determine the most functional and most economical space for your needs. Sometimes it will be a traditional office space, sometimes it will be co-working space. Maybe it will be WeWork or Pipeline, maybe it will be Regus and it will often be a traditional office landlord like Blackstone, Hines or Crocker. It may even be an office condo. Truss will compare all alternatives on an apples to apples basis and help you make the best decision in record time. And we’ll even pay the tenant a bonus for leasing their space with Truss. Sound interesting? Check us out at truss.co or email me at ken at truss.co.