The future is now! Well, actually, the future is more flexibility from landlords on office space and leasing terms.
As a landlord, you should be aware that properties that offer shared workspace are in huge demand. Shared office spaces are great because they act as temporary work environments that can be rented from landlords for multiple different amounts of time. But don’t think that one size fits all! These spaces can be made their own extremely easily, and a lot of diversity is seen throughout.
According to the Commercial Real Estate Development Association, “The growth of independent workers is outpacing hiring within the overall U.S. labor force. Full-time independent contractors and freelancers accounted for a 12% increase in the nation’s workforce over the past five years, compared to a 7% increase in overall U.S. employment. MBO’s study also projects that 40 million Americans will choose to be self-employed by 2019.”
What does this mean? Those people are no longer interested in the old 9-5 workday from a stingy office. It means that you don’t necessarily have to be in a building with ONLY people from your own company. Landlords, this is where the flexibility comes in. People want more wiggle room when it comes to office size, space, and length of stay, and the terms of their leases!
The bottom line is that the shared space model is changing. When did this happen exactly? Well, it’s hard to tell. But it seems that, following the recession, building owners were hesitant to lease to just ONE office owner or business. It would be much easier (and less risky) to rent office space and warehousing to multiple business owners because more people can help pay the rent.
Many people ask – what is the best thing you can be as a landlord? A lot of words come to mind – fair, helpful, enthusiastic. How about FLEXIBLE? Not all renters fit into that “one-year lease” mold. Many building landlords are starting to lease space with more flexible terms in order to fill availability that may arise in long-term tenancy. Even in areas with low vacancy rates like Washington, D.C., office users renewing leases are cutting down on extra space in order to cater to what modern renters and businesses are looking for.
Colliers International’s Ryan Hoopes, a senior associate for flexible workspace advisory services, says that “providing temporary or flex space is a way for landlords to use excess space to recover dollars they’re missing. What makes flexible office providers successful is the ability to offer quick delivery of move-in ready, functional workspace.” Why? It’s simple! Workspaces like these can quickly and easily be move-in ready because permits, inspections, and other governmental processes are not required.
Here are some things you can do as a landlord to accommodate this:
- More flexible long-term leases
- More options for short-term leases
- Renewal and extension options
- Sublease options
- Termination options
- Expansion options
What do all of these have in common? Options! People on the hunt for property and space want more of them.
In closing, I’d like to leave you with this information from FMLink:
It really hits the nail on the head when it comes to shared space, flexibility, and today’s renter/landlord relationships:
“The game has already changed for building owners. Due to increasingly sophisticated technology, work no longer is confined to a single location. Office tenants—from startups to major corporations—now demand flexible, collaborative, and engaging workspaces. Coworking providers have met this demand directly, and they are now a critical component of the marketplace. Certain shared workspace companies may rise or fall depending on the economy and their specific offerings, but coworking will remain an industry to watch because it is here to stay.”
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