In 2017, North American offices averaged 151 square feet per
worker, down from 225 square feet in 2010, according to CoreNet
Global. Why the shift? Companies, which have historically been
constrained by space limitations, are moving toward proactively
reducing their footprints while capitalizing on the benefits of
shared space, such as increased flexibility for employees and more
collaborative work environments.
The impact of shared workspaces goes beyond the corporate
work environment. Landlords are
working to meet the demand for
space as a service to tenants
rather than providing a space for
tenants to service. From the rise
of coworking to the growth of
smart building technology, the
evolution in how we work is ultimately changing our social and
our built environments.
The ongoing success of We Work,
the global brand that pioneered the coworking concept, is an indication of the growth of this industry. The company continues to
thrive, with 140 locations in 44 cities across 15 countries. The company is valued at close to $20 billion and growing in its appeal
beyond freelancers and small businesses to corporate America.
Why are shared office spaces thriving, even in corporate
America? According to PricewaterhouseCoopers, real estate costs
make up 8% to 9% of revenue in the professional services industry—a fee that PwC is aiming to get down to 2% as it plans to convert all of its US offices to coworking spaces. Shared spaces provide
options for companies that either lack the budget for renting an
office or want to rid themselves of the costs of real estate, furniture
or services that were previously thought to be non-negotiable. And
they are ideal for hosting meetings as well as for on-demand space
for satellite employees, mobile workers, and freelancers.
A real-world example of shared space done right is health insurer
Aetna, which has leveraged remote employees for 20-plus years.
More than 31% of its employees telework and consequently, the
company has reduced its office space by some two million square
feet, resulting in an approximate annual savings of $78 million.
Breather, another of the shared workspace pioneers, allow members to quickly and easily secure uniquely designed meeting spaces
scattered throughout major cities. The spaces can be rented by the
hour or by the day and provide a respite for workers outside of
their home or office—truly illustrating a space as a service concept.
Shared work environments are made possible due to advance-
ments in technology such as the Internet of Things. The rise of
IoT-enabled space—commonly known as smart or intelligent
buildings—is impacting the commercial real estate industry due
to its potential to allow owners to improve margins through cost
savings and operational efficiency. How? Enhanced building per-
formance will lower operating costs, facilitate predictive mainte-
nance, and increase security.
Smart technology can also enable commercial real estate com-
panies to create competitive differentiation and improve top-line
growth through service innovation to tenants. This can include
leveraging sensor data to offer tenants more customized design
and experience by capturing and analyzing end-user behaviors.
Interactions and movements can be tracked via footpath technolo-
gies, enabling office property owners to provide insights that help
design customized and comfortable workspaces.
Smart technology solutions are rapidly advancing the CRE
industry, yet beyond the evolving technology and growing number
of shared working environments, there is great value to be had in
the collaboration, innovation and camaraderie that occurs within a
social environment and landlords are starting to pay attention. By
offering more collaborative spaces, landlords are responding to
the rise in the coworking trend by designing spec suites with a
more shared space feel and even going as far as to offer shorter
lease terms, a characteristic typical of coworking lease terms.
Whether coworking in a shared space, or working in a smaller,
open-office concept, productivity and motivation both rise from a
general sense of well-being among the workforce. A happier,
more efficient workforce allows businesses to be more profitable.
Profitable businesses pay rents and rents keep buildings thriving.
When commercial real estate thrives, the greater community
thrives. Marrying smart technology platforms within commercial
office space will continue to build stronger real estate that will
increasingly improve efficiency and drive real value. ◆
A longer version of this column originally appeared on GlobeSt.com.
Office Space as Both a
Service and Smart Tech
Whether coworking in a shared
space, or working in a smaller,
open-office concept, productivity
and motivation both rise from a
general sense of well-being
among the workforce
BY DIANE VRKIC
Diane Vrkic is founder and CEO of Waypoint, an asset management
platform for performance analytics and operations management based in
San Francisco. She may be contacted at email@example.com.
The views expressed here are the author’s own.