Office Depot The Newest Entry Into DFW's Coworking Market, Which Is Growing Nearly 20%
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Coworking is flooding into DFW, and new types of providers are catching the wave.
The Dallas-Fort Worth office market ranks seventh in the nation for having the most flexible office space per square foot, CBRE said in a new research report.
The metro area's flexible office footprint grew to 2.48M SF in 2018, up 19% from a year earlier — an increase of almost 472K SF, CBRE said.
Flexible space now accounts for 1.13% of the total DFW total office inventory.
As concerns grow over whether coworking can sustain its growth in down times, new players are emerging in the space using traditional retail — and even multifamily concepts — to capture office-sharing traffic.
These new entrants are raising questions about whether normal coworking companies could suddenly find themselves battling larger retailers or apartment complexes that already have the space and traffic to devote to their own flexible office concepts.
Office Depot is one such competitor. The national office supply store is opening Workonomy Hub coworking spaces at U.S. stores. One such facility, located at 1000 West Airport Freeway in Irving, Texas, celebrates its grand opening this week.
Through these Workonomy hubs, the retailer intends to offer private offices, conference rooms, dedicated desks and places for drop-in workers.
The company is able to do this while still offering the tech-support services and office-related functions it already provides consumers each day.
The first Workonomy Hub at Office Depot premiered in Los Gatos, California, and the office supply retailer has also announced a coworking space in Lake Zurich, Illinois.
The multifamily space is another possible competitor for flexible office space providers. DFW-based developer JPI said a new apartment project under its umbrella in DFW will feature coworking inside.
So what happens to coworking spaces that charge monthly memberships for one-desk remote workers or drop-ins, if apartments, coffee shops and larger retail concepts start offering these individuals more attractive or cheaper spaces?
"I think it would depend on how forward-looking some of the competition is," Whitebox Real Estate President and Managing Director Grant Pruitt said. "You are seeing people challenging the definition of coworking space. The landscape is changing; and it's continuing to change. I think we are going to see competitors come from places that we haven't seen in the past."
Predicting how retailers or apartments offering coworking space could impact professional coworking operations is speculative at this point, Pruitt said.
He said he believes the professional side of coworking will always remain, but he is curious about what could happen if retailers start offering something similar and maybe at a lower price.
"I think you are seeing people push the limits of the industry," he said. "You are going to see a maturation of this space and you are going to start seeing some sort of evolution for the path it's going to take."
In the future, Pruitt said, there will never be a question as to whether coworking space is needed for independent workers.
The question will be is someone still willing to pay for it?