Coworking Sector Continues Expansion with Annual Growth rate of 21%
Coworking – For the Startup, Freelance and Corporate Workforce
As the freelance economy continues to evolve companies – both big and small – are managing their expense lines and testing new urban markets with co-working spaces.
In the past, many co-working companies were targeted toward freelancers and startups. According to the CBRE’s 2015/2016 Americas Occupier Survey of 226 Americas-based corporate real estate organisations, more than 40% of respondents are using or considering shared workplaces.
Howard Tullman, CEO of 1871, a Chicago-based non-profit startup that houses nearly 500 companies in 150,000 square feet, says that´s not surprising. “Many Fortune 500 corporations are stuck in the suburbs and office parks” he says, and it takes large companies several years to create a downtown or central city location, which can be a nightmare in terms of how long the process may take.
“Instead, they are more likely to go out to a coworking facility and rent a block of space” he says.
“These aren´t startups or freelance companies. These are large corporations that have to find 10 to 20,000 square feet and they would like to rent it for a year or two as an experiment before they go to their own facilities with their own people”
That´s exactly right, says Dominic McMullan senior director of corporate communications for coworking firm WeWork, a $16 billion privately-held New York-based company that opened in 2010 and has 100 locations in 28 cities. “We are seeing bigger companies trying to manage their companies with our real estate. We are seeing General Electric Co., Dell, Bank of America, and a lot of other blue-chip companies taking bets. They are able to expand and contract their space according to the demand they are seeing from their company”.
The co-working culture at shared workspaces gives entrepreneurs exposure to Fortune 500 companies – McMullan says corporations using coworking offices include Lyft, Airbnb, Red Bull, Delta Airlines, Salesforce.com, Staples and Dropbox.
Based on its report published in January, CBRE says co-working in the US is estimated to be experiencing a five-year compound average annual growth rate of 21%.
Consequently the coworking real estate sector is attracting significant investor interest, particularly with contraction being seen in other markets in what has been a year of economic uncertainty thus far.
At UPI, we advise you to consider investing directly in a coworking space from an exciting new provider known as our//space. With shared office locations in Dubai, New York, Miami and Birmingham, UK, this is a firm set for considerable growth in the short term future.
Much of the business success of coworking facilities depends on ownership and leadership behind the operation. Our//space is founded on solid core principals, with exponential growth predicted over the next 5 years.
An investor in the coworking sector should consider the demographics of the market and the competition and the proximity to public transportation of a co-working space.
A spokesperson for our//space said: “When we opened our first location, we looked for where people wanted to spend their time. People with laptops and mobile phones can work from anywhere but a lot of people want to go to coworking spaces so they can be inspired by other people in other businesses.”
To find out more about how you can invest in this rapidly emerging market, contact one of our experienced advisers today!