What to make of the surging growth of co-working spaces, the uber-flexible, amenity-heavy office environments being marketed to young freelancers, entrepreneurs and small businesses? Some are skeptical. I met with a client last week who thinks the growth of providers like WeWork is a bubble waiting to burst—that their client base of small entrepreneurs will soon either fail or succeed, in either case abandoning small-scale co-working space and leaving the provider holding expensive, under-utilized long-term lease obligations at sparkling Class A buildings.
While my client may be correct, it is impossible to discount co-working’s current relevance. According to Crain’s, WeWork is now valued at $10 billion and leased more space in Manhattan (550,000 square feet) than any other company during the first half of 2015. In Atlanta, they are planning to open a Buckhead location soon.
As a full-fledged participant in the gig economy who works mostly from a home office, I have to admit the appeal. There’s something inspiring about doing creative work amongst people, even when those people have no connection to what I’m working on. That’s why, when distraction or writer’s block hits, I often escape to Starbucks.
But if my home office is not always the ideal location to focus, a coffee shop is not a great place for a conference call. And neither spot offers much chance of meeting a potentially valuable client or collaborator. A flexible spot at a co-working location, on the other hand, offers it all for a reasonable fee. If they could figure out how to get me there without experiencing Atlanta’s traffic, they may have a new customer.
Whether co-working continues to boom or suddenly goes bust, it offers a key insight on the future of customer service in the commercial real estate industry. For better or for worse, office space is being consumerized. Certainly this is happening within corporate spaces, which are increasingly designed to look more like the common room at the University Union than a traditional office suite. But co-working sites, with their mass-flexible ethos, are accelerating the trend. If users don’t like the space, they now have much greater ability to vote with their Vans-clad feet and work somewhere else.
What does this mean for building owners and property managers? Increasingly, it means that “customer service” is less about keeping a single administrator or leaseholder happy and more about delivering an experience to every worker. Today’s workers expect their workspace to provide creative stimulation. They expect to work in a variety of modes according to their choices at the time. They even expect the ability to tell their buildings when they are too hot or too cold. Whatever happens to WeWork and its compatriots, none of this is going away any time soon.