Should You Add a Co-Working Space to Your Office Property?
At first, co-working spaces made sense largely for startups and independents. Now everyone is using them. Turns out, it’s a cost saver even for established businesses.
Unlike a traditional office lease, tenants don’t have to go through months and months of negotiations and paperwork processing for co-working space. They aren’t even responsible for providing electric, internet, and a lot of office equipment to their employees – that’s the office owner’s responsibility.
With studies showing that workers are happier and more productive in co-working spaces – generally speaking – these types of offices are now in high demand. So how do you know if adding a co-working space to your office property is the wise thing to do? Here are a few things to consider:
Can You Be Competitive in Your Market?
The bulk of co-working spaces exist in large cities where the population density is high. These are the types of spaces in downtown Chicago or Manhattan for instance, that most small businesses couldn’t afford to lease, except through co-working.
You should conduct market research. Are there other co-working locations nearby that you will have to compete with? What are their rates and can you be competitive?
Will Your Office Design Match Your Target Tenant?
Some co-working spaces are like frat houses with creative teams literally bouncing things off the walls and playing brainstorming games. If you are targeting financial firms for example, you will need to consider a) the market for the type of tenants you seek, and b) an office environment that is conducive to the type of tenants that will be occupying the building.
Like office in general, the best plan is to provide a mixture of both in order to maximize the number of tenants you can attract.
Can You Offer Flexible Leasing Options?
There are tenants who will rent a space in your building one month at a time for years while others that will only be looking for a short term lease. One reason why those tenants choose co-working spaces is to avoid being locked into a long term lease.
Remember that if you do add co-working space to your office property, you have to be able to offer lease options that are more flexible than the ones that are typical to office. This will require some effort trying to keep the space occupied while attracting new tenants regularly to fill vacancies.
What Cool Amenities Could You Offer?
From apartment buildings to office parks, tenants want amenities that cater to their quality of life. That means office buildings with an on-site Starbucks, a dry cleaner, and a barber shop/hair salon, just to name a few.
When you decide to jump into the co-working space, amenities are a big part of it. What cool amenities can you offer your tenants? Space for collaborating and networking with fellow tenants is considered a huge amenity for any co-working space. You’ll want to make sure that you can provide shared space for all of your tenants within your office property.