Bisnow Exclusive: Does Co-Working Make Sense For Everyone?
A new CBRE report says co-working makes financial sense across the board in pricey gateway markets—even for larger, more traditional firms, not just the typical startups that occupy the space.
Evan Knudson (pictured), CBRE’s San Diego office specialist, tells Bisnow the benefits of co-working are “a function of flexibility, cost and the benefits that come from being in a collaborative environment.”
“By reducing the lease term and not requiring large sums of money to be set aside in security deposits, furniture, it allows companies to expand and contract their workforce when needed,” Evan tells us.
He adds that being in-house with other forward-thinking, creative companies creates opportunities for new ideas to grow organically.
Bisnow’s panel of co-working experts at last week’s South Florida Future of Office event said the same thing.
“We found that even large law firms like to be in co-working space,” said Pipeline Workspaces' Philippe Houdard (pictured here with the panel moderator, Akerman's Neisen Kasdin). “I think that there's a transformation, which I do think reflects greater societal trends, which is shared space is for everybody.”
How much is the trend spreading? Just check out the growing checkbooks of startups in the sector—co-working giant WeWork just hit a $16B valuation.
David Mandell, CEO of the shared office space marketplace PivotDesk, tells Bisnow that his firm is seeing quite a few larger clients using his site for shared space recently.
“Over the past year the average guest size has increased significantly,” David says.
David says the financial flexibility of shared spaces—like not having to commit to a lease—is a much bigger draw than the culture that shared space offers.
“Maybe they’re building out a new office that’s not going to be ready for a year," David says, "or their team is expanding quickly and they’re not sure about space planning yet.
“Signing a three-, five- or 10-year lease is just not the right thing for them when they realize they have options."
PivotDesk prides itself on being not just co-working, but a “dating service for businesses," so David sees a line between the space they offer and the space at somewhere like WeWork—one difference the CBRE report didn’t go into.
“The data that we hear repeatedly from companies that come to us from co-working spaces is that ‘the environment was unbearable,'” David says, adding users tell him "we need to share with one company that has a compatible culture with ours.”