Ten years ago, the coworking and shared workspace was dominated by startups and small budding businesses looking for cost-effective ways to get their enterprises off the ground. But today, that isn’t the case anymore, says Tony Ford, senior vice president with Colliers International. Ford released a snapshot of the coworking market, which as of the first quarter of 2016, had 711,300 square feet of coworking space in the downtown Seattle market, roughly 1.6 percent of the central business district’s total inventory of 50 million square feet, according to his figures. The bulk of that inventory is occupied by Regus, taking up 196,000 square feet and WeWork, with 151,000 square feet.
The topic was even a subject of a recent BOMA Seattle King County monthly luncheon, where Ford spoke along with Bill Sechter, the Founder of ATLAS Workbase, a co-working environment that opened its first location in Seattle earlier this year.
“The environment for coworking is definitely robust right now,” said Ford. “It’s come a long way and there are several different groups getting involved.”
While the target client for these types of spaces used to cater towards smaller businesses, today’s coworking spaces offer a more professional setting. “It’s definitely changing,” Ford said. “It was the model before and the target audience back ten years ago, but with the target audience today, you see larger companies using these kinds of spaces for different departments and groups,” he added.
Ford said larger companies often use these spaces to supplement their permanent office spaces. “They’ve got their home base and cultural fit for permanent staff but for flexible staff, they’ve found utilizing these operations works for them,” he said. Ford told the story of a client who has a permanent office space but with a large transient sales staff the client utilizes a temporary shared workspace instead. “They can use it as needed so they don’t have to lease up that extra big conference room to host everyone they use periodically. It’s an efficient way for companies to expand their real estate footprint without committing to more leases,” he said. He added that shared workspaces are often beneficial and more cost-effective for employees who telecommute or those in the sales industry.
While the spaces offer flexibility and are often cheaper than trying to rent out a hotel conference room, it does come with a price. “I do think it would be a premium and the reason for that premium is the flexibility you get there,” Ford said of companies looking to have larger operations in these spaces. However, depending on how much flexibility is needed, it may be worth the price. “Even day to day, you can flex the size you need,” Ford said. “Many of these places have multiple different meeting rooms of all different sizes and have different functions, so whatever a businesses requires, they can flex, move and change.”
Some of the coworking environments allow clients to move between spaces and grow and shrink, and while there are fees associated with those uses, you don’t have to pay them when you aren’t using the space, Ford said. “You get flexibility and customization,” he said. “But for the most part, the traditional office space still works for most groups.”
One of the downfalls of the shared workspace model, however, is that there’s not much of a barrier to entry, Ford said. “If you or I wanted to go open up a coworking space tomorrow, we’d just need the capital and the credit to do it, and we could open it up and market it,” he said.
Although shared workspace isn’t ideal for everyone, Ford said it does work for those looking to utilize the space as a sort of add on to their current office space. “They kind of get the best of both worlds,” he said. Although, Ford added, while the demand for these spaces are up the big question is when will it dry up.