Here’s how coworking will thrive in Colorado
A focus on service, safety and flexibility will push the industry forward
It’s no secret that the modern concept of ‘coworking’ has reached an inflection point.
While owners and operators of traditionally dense office space begin to feel the squeeze as tenants reevaluate their reentry plans, coworking firms are in a unique position to capitalize on a forthcoming high-rise exodus.
As the owner of three Denver area shared workspaces, I’ve been encouraged by the inbound momentum that our locations have received. In fact, leasing traffic is up 20% year-over-year when comparing inquiries from June 2020 to June 2019. At Shift Littleton alone, we have leased 20% of our available office space in the last 10 days.
What’s more, according to a new report published in collaboration between Coworking Insights and Coworker, more than 70% of workers that officed out of a shared workspace prior to COVID-19 plan to return. Plus, nearly 55% of remote workers surveyed said they’d consider joining a coworking space after COVID-19 – even though they didn’t use one before.
This positive news certainly doesn’t mean that there aren’t challenges ahead. Although acquisitions and category consolidation will dominate industry headlines for months to come, agile, well-capitalized firms have more reason than ever to be optimistic about the future of coworking in Colorado.
Proximity to Home
According to industry data, nearly 90% of all coworking space is located in dense, urban environments. Although we might not see a mass coworking transition from our cities and urban corridors just yet, firms that offer suburban shared workspace environments can provide an increasingly attractive and viable alternative to traditional urban coworking. Without sacrificing the walkability and central location that so many coworkers enjoy, suburban coworking can take advantage of this demographic shift by keeping these professionals closer to home.
Working from home has had its benefits, chief among them the non-existent commute. We anticipate that as people resume their normal routine, including going to the office, a space closer to home will become preferable to the traffic laden pre-COVID-19 routine. In fact, according to a recent office trends report published by CBRE Hana, 56% of people surveyed want increased flexibility between an office, a remote location or have to the option to exclusively work remotely. This data not only validates the importance of suburban coworking facilities, but also real estate’s No. 1 rule: location, location, location.
What Denver submarkets offer is the opportunity to get all the benefits of the office, but closer to home. Rather than waiting to take an elevator seven stories, members can choose to walk the one or two flights of stairs. This also means shorter commute times to the office and increased flexibility to run home to let the dog out, pick up the kids or grab lunch.
In addition, increasingly appealing locales like Littleton, Cherry Creek and Glendale provide a similar amenity suite – think locally-owned restaurants, yoga studios and gyms, dry cleaners and specialty retailers – to offices located within the Central Business District.
While there were perks, working from home also came with a handful of daily (much less glamorous) chores. In many cases, people have swapped their business lunches with tasks like laundry, household cleaning and keeping their children occupied throughout out the day.
As employees return to the workplace, it’s likely they’ll seek out a space that can provide a highly personalized – and pampered – experience as opposed to the self-service model typical of today’s work-from-home and coworking environments. This means it’s more important than ever that coworking operators put intention behind every detail and authenticity into every interaction.
Higher Safety Standards
Even with social distancing in place, office environments within traditional high-rise properties may have a harder time addressing building mechanics to keep employees feeling safe and supported.
In this case, coworking spaces, especially those that occupy retail storefront-style real estate are at a significant advantage. With dedicated exits and entrances, coworking staff can disinfect high-touch surfaces like doorknobs and railings with greater frequency.
Smaller footprints – an office trend that will become more prominent in the wake of COVID-19 – also provide an opportunity to make more immediate and lasting changes. Whereas it might take property management teams weeks to address building-wide safety changes, a smaller footprint makes it easier to tackle challenges in real-time.
State-of-the-art air filtration and UV disinfectant systems design to treat viruses, bacteria, airborne mold and pollution, in many cases, can be installed in a matter of days.
At first, coworking appealed to young, upstart freelancers and independent contractors, however shared workspaces have evolved to play an important role for mid-career professionals. In many cases, these individuals are running their own small businesses or are working as a satellite team member of a large corporation.
While these companies have undoubtedly developed strategic one-, two- or five-year growth plans, the crystal ball can become somewhat hazy after that. For many business leaders currently occupying traditional office space, this should beg the question: why I am signing a 7-year lease?
Instead, shared workspace membership agreements typically range in length from 1-2 years, allowing firms the flexibility to scale their workspace needs up or down based on current needs and business projections.
The high degree of flexibility coworking environments offer will only become more important as we grapple with the impacts of the pandemic. Office space tends to be one of the largest expenses for a business, outside of headcount. Having the flexibility to scale up or down as needed will be a determining factor in the office market for companies of all sizes moving forward.
By leveraging a focus on service, safety and flexibility coworking can be well-positioned to usher in this next generation of this industry.