Co-working spaces are becoming increasingly popular as businesses large and small leverage the flexibility they provide. The arrangement allows organizations or individuals to lease either an individual office or workstation and share amenities such as conference rooms, lounge areas and more, splitting the costs with other tenants. It offers privacy for those looking to put their heads down and concentrate, opportunity to network with those sharing the space, as well as a professional space to connect with colleagues or host clients. That can be beneficial for startups looking to network and get their name out, as well as for Fortune 500s that want to test a new market without committing to a full five- or 10-year lease.
“There’s a lot of flexibility in a co-working space,” says Connor Redman, Vice President at Cushman & Wakefield | CRESCO Real Estate. “And because of that flexibility, we’re seeing an increase in interest from a range of businesses throughout Northeast Ohio.”
Smart Business spoke with Redman about the rise of co-working spaces and how they can meet a variety of needs for organizations big and small.
What benefits do co-working spaces offer?
Some organizations are finding value in co-working spaces in part because they require far less commitment than a traditional office suite. With the latter, a business must sign a five- to 10 year lease and likely spend considerable capital building out the space to their needs. While leasing a suite has many benefits, such as having privacy rather than sharing the space with others from outside the company, organizations are increasingly finding value in the financial flexibility co-working spaces provide.
Organizations as diverse as Fortune 500 companies and small nonprofits are using co-working spaces primarily because of that flexibility — it’s one of the primary reasons why co-working opportunities have become so popular. Being able to lease a space monthly or annually, and increase or decrease how much space they’re using whenever necessary, provides the flexibility that organizations need as they grow while also eliminating the need for a long-term financial commitment.
How do these spaces fit with changes such as remote work?
With the increase in hybrid and remote work arrangements, co-working has been a solution for companies that are downsizing and just need a home base or a place to host meetings with clients. They’re a place for people to connect to Wi-Fi, print documents or find a quiet space.
Co-working spaces have also adapted to changes in the way people work. Historically they had been focused on maximizing the number of offices in a footprint to yield the highest returns. Today, co-working spaces are providing more social areas that facilitate collaboration, meetings and networking.
How are economic factors affecting how organizations view co-working spaces?
There’s been a significant influx of co-working spaces coming online within the past five years. Co-working spaces are on the rise all over the world and Cleveland is seeing several new facilities pop up. For instance, in the Playhouse Square District, there are a number of facilities for companies and individuals looking for an inexpensive, professional place to work.
The rising cost of construction and increased interest rates have led property owners to seek longer lease terms from tenants. Real estate is already a significant expense for a business. That’s one reason why co-working has had an increased appeal because it offers the ability to reduce a company’s exposure by leasing individual offices on a month-to-month basis rather than committing to a five-year lease obligation.
Many organizations have experienced rapid growth in the past few years. Co-working spaces provide flexibility to those businesses, offering the opportunity to lease five offices one week and 10 the next. Having that flexibility means companies are not limited by their physical space — they’re able to grow or contract without financial penalty as their needs change. Given today’s uncertain economic environment, the fluidity that co-working spaces offer can be a significant benefit to organizations. ●
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