EXCLUSIVE: New Broker Poll Shows Coworking (Even WeWork!) Not Seen As Much Of A Threat
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Commercial real estate brokers are much more convinced that coworking is a lasting trend, and they have more tenants asking for flexible leases, a new poll released by commercial real estate software company Apto shows.
The Apto National Broker Buzz Poll was conducted during the past two weeks and polled both customers and non-customers. It found that brokers are less threatened by coworking, including currently imploding behemoth WeWork, and that corporate/credit tenants are still bullish on standard medium- and long-term leases.
WeWork fears are falling even as its fortunes are falling — 56% of brokers polled said that they don't consider WeWork a threat, up from 49% a year ago.
When asked if the inventory of coworking space significantly affected the availability of standard office lease space in their market, 80% said it had not. Likewise, 87% said that the amount of coworking space available locally had not affected pricing.
“WeWork as a company may be facing challenging times, with their IPO now up in the air, but the overall market for coworking and flex office space is real and will continue to grow over time, likely becoming a substantial share of the office lease market. Real estate as a service is here to stay,” Apto founder Tanner McGraw said in a statement.
“Perhaps surprisingly, for all the attention WeWork has gotten in the past year, commercial brokers are less threatened by the growth of the coworking market than they were a year ago. I suspect this is because brokers are more comfortable with the idea of real estate as a service, and many have figured out how they can profit from the trend.”
But tenants are now more likely to look for more creative leasing, with 56% of respondents saying that corporate/credit tenants are more likely to ask for more flexible lease terms, including shorter leases. That could lead to some consistent coworking domination in parts of the CRE sector, brokers said, but pegged the market share coworking will have in 10 years to only 25% of total inventory.
“This [increase in flexible lease demand] is a direct result of the coworking trend. Tenants may not seek flex space specifically, but increasingly they want their leases to be more flexible,” McGraw said. “Brokers as service providers no doubt are trying to accommodate this desire as part of their negotiations on behalf of tenants and landlords. Our presumption is that landlords are, too, in the interest of keeping corporate tenants in traditional leased space.”