CRE Brokerage and Coworking Bridge A Gap
Subscription-based business models are omnipresent in today’s ever-changing and lightning-paced world. From Spotify, Netflix, BirchBox to Blue Apron, more and more people are subscribing to services that not only make food and entertainment more accessible, but they also allow people the opportunity to save money and time by allowing them to choose what services they want and when they want them. Does coworking fit into this category?
Gone are the days of buying entire albums for a few select songs, endless trips to the grocery store to make a single home cooked meal, spending endless amounts on makeup and beauty products before you find what’s right, or the absurdly expensive $5 to rent a single movie or video for only a few measly days. People have not only become accustomed to these subscription-based business models for the money they save but also for the time saved and accessibility to a wider variety of products and services, benefiting not only the consumer but the businesses represented in these services.
All across the world, consumers are rapidly adopting more and more subscription-based business models for the added simplicity and cost-saving potential, and the idea has become so widespread that it’s appeared in the professional lives of a large portion of people. Starting with SaaS-based businesses (software as a service) including MailChimp, Dropbox, Salesforce and now Google, professionals across the world are ditching the traditional model of purchasing and installing software with high upfront costs.
Instead, implementing SaaS solutions that are easy to maintain, implement, and come with the added benefit of being able to cancel once they no longer are in need of said services, are the wave of the future for most if not all business and industry. This same trend has begun to develop in another way with SPaaS based business models (space as a service) with companies like SharedSpace, Industrious, Spaces and the international giant, WeWork.
Why Businesses are Choosing Coworking
Small businesses and entrepreneurs are flocking to coworking spaces and shared work environments, and according to CRETech, coworking spaces increase, “independent workers and employers’ desire to deploy more workers remotely, attract talent and gain more flexibility for their space…”
But as more and more coworking style environments begin to appear, with flexible month to month memberships, included conference room time and a full suite of included amenities, like free coffee, wifi, printing, and parking, what does this overall trend mean to brokers in the traditional CRE world?
Does the trend of space as a service mean more competition and a greater impact on brokerages for office space? The answer is not as cut and dry as you might think. Coworking spaces like SharedSpace still take the form of traditional office space for our clients, but with a higher volume of smaller companies with shorter lease terms.
Most coworking operators, SharedSpace included, offers brokers a 10% commission on the monthly price for any office sold for up to one year, and in the end, the real question is whether or not focusing on smaller deals is worth the time and effort for a broker
Although the scale is much smaller than what a traditional CRE broker might be accustomed to, the nature of a flexible coworking style environment is best suited to small growing companies and entrepreneurs, with the potential to have an open and collaborative workspace without outgrowing their office or lease. However, once these companies have outgrown their coworking space, traditional CRE brokers who have relationships within these coworking spaces can leverage their relationship to help find these businesses a new and larger, “traditional” office space.
In the end, people and businesses are becoming more and more accustomed to flexibility, simplicity and the ultimate cherry on top, the ability to keep office expenses to a minimum, driving the success of shared work environments like SharedSpace. The choice to work and build relationships with a coworking space is up to the broker, but as ReThink CRE put is so elegantly, “The coworking office subscription model is filling a need in the market by providing flexibility and a sense of community to tenants. There are some potential risks for brokers, but there are many ways to continue to tap into relationships to expand future sales and should be embraced by brokerages.”
SharedSpace is a regional coworking business focused on creating modern, professional, and energetic work environments to stimulate the creativity and productivity of entrepreneurial businesses and their teams! Please don’t hesitate to reach out if your business is looking for creative opportunities reinvigorate your workforce and brand with a modern coworking environment like SharedSpace. Contact us today to schedule a tour of our facilities or for a consultation on your business.