In 2016, Microsoft made headlines when the tech giant decided to give access to 30% of their employees to WeWork locations. That same year, IBM partnered with Galvanize, the coworking operator, to be part of their newly launched space in West Soho in New York while Barclays Bank announced the launch of their fintech accelerator space Rise, in New York City as well.
So why are these Fortune 500 companies suddenly interested in the coworking and shared offices sector?
The answer is quite simple: coworking’s culture and flexibility. As the needs of a multi-generational workforce demand changes in the work environment, a closed office or cubicle is not desirable anymore. Employers are looking for ways to boost creativity of their employees, and coworking, with its ethos of community and collaboration, with a big chunk of their members coming from start-ups, seem to be the perfect alternative to the uninspiring standard.
Verizon, the global telecommunications company, partnered with another coworking space in the US. Their Senior Vice President and Head of Global Real Estate, John Vazquez has this to say about partnering with a coworking space: “To us, the real value is what we get by bringing entrepreneurs into the building and having them meet our folks.”
According to CBRE’s Enterprise survey, 65% of enterprise companies plan to incorporate coworking into their portfolio offering by 2020. Fortune 500 companies’ life cycle have changed, from 33 years in 1965 to expected 14 years in 2026. This shorter lifespan has led to companies exploring more flexible office space solutions. Start-up growth, workplace mobility, and the shared economy model, are factors affecting the future plans of today’s biggest corporations.
The major brokerage firm, JLL predicts that by 2030, up to 30% of all office space will be, in some form, flexible or have an open layout design. Other companies are also choosing collaborative private team spaces that embody their culture, and have a level of service that is appealing to host their client in. The space requirement often has a short decision time requirement based on project win date, and project start date.
Lastly, the motivations for creating a widespread workforce range from a desire to be close to key partners to the need to tap into additional talent pools. Fuelling a company’s growth in different market locations makes using flexible office space as a useful expansion tool.
As the demand on shared office and coworking spaces continuous to grow, commercial property developers are tapping into this sector as a lucrative space that holds the future of the workplace.
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