The Effects of Co-Working on Leasing Activity

Will co-working continue to drive office leasing?

In 2019, co-working was a major driver of office leasing activity.  However, after the failed launch of the office-sharing start-up, WeWork, will co-working continue to be a force in the leasing market?  Your commercial realty advisors report.

Despite the failed launch of WeWork, experts predict that the co-working office leasing sector will continue to grow in 2020.  This is largely due to the changing perceptions of shared workplaces.  In the past, c0-working spaces were predominantly viewed as money-saving solutions for small businesses and individuals looking to launch their own ventures.  However, larger companies are now exploring the possibilities offered by investing in co-working spaces.

While small, independent businesses still make up the bulk of co-working leases, large corporations are now offering co-working spaces as a perk to their employees.  Oftentimes, these major businesses treat co-working spaces as supplements to their primary office locations.  Working out of these spaces offers employees flexibility and convenience, while also solving the short-term space needs of growing operations.

As this demand for co-working spaces continues, landlords still feel comfortable signing leases to co-working tenants.  However, following WeWork’s failure to launch, experts do anticipate landlords being a little more careful before leasing space to co-working initiatives.  Closer scrutiny of possible tenants’ financial models and business plans will likely become a prerequisite before lease agreements are issued by landlords.

This is how co-working will continue to affect office leases.  Interested in staying up to date with the latest commercial real estate news?   If so, then contact the experts at California Commercial Realty Advisors, Inc.  Your commercial realty advisors are eager to assist you with all your real estate needs today.


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