As the demand for flexible workspace continues to grow, co-working spaces have become a popular option for businesses of all sizes. Going by global trends, they are being increasingly adopted.
According to a report, the number of co-working spaces worldwide is expected to more than double by 2024.
This trend has not gone unnoticed by commercial real estate (CRE) owners, who are competing to capture a share of this market. However, competing in the co-working space requires a different approach than traditional leasing models.
CRE businesses are emulating co-working space companies. They are selling space on a short-term basis while redesigning their space to look more like WeWork.
This can prove effective in the fast-growing space-sharing market. However, such commoditization will result in a price war. Tenants may move to a cheaper option at the drop of a hat.
To see real gains, CRE owners must ensure that tenants don’t leave. And that will only happen when tenants receive much more than just an affordable working space.
Metrics such as Retention rate, lifetime value, engagement score and net promoter score play an important role in maximizing returns.
CRE Owners need to level up and differentiate themselves from co-working space providers. Some of the areas where CRE owners can improve their game are provided below:
Use of Technology
Technology is going to play a critical role in the transformation of spaces into smart offices. Various aspects of a building like lighting, air-conditioning, elevators, etc., need to be connected to the office management system.
There must be seamless tracking of data, visualization of information and building performance management. In addition to the building infrastructure, building operators must be able to analyze environmental parameters such as light conditions, humidity, CO2 levels, etc.
CRE owners have a unique advantage in being able to integrate such technologies into the building. A complete closed-loop system can provide new insights. This can help develop new business models, revenue generation capabilities and cost containment opportunities.
Wellness & Well-Being
The average workday is getting longer and the work-life balance is getting affected. People are now plugged into work almost every waking moment. There is no time to commute to yoga classes or to the gym.
WeWork has seen the need to provide its tenants with a more holistic environment, so it has rebranded itself from just a pure workspace provider to provide community and even live-in services (WeLive).
CRE owners must respond to this new direction by providing amenities and services that go beyond just offices and workspaces.
CREs can differentiate themselves by providing value-added services. These services may include facilities such as Gym, Spa, Cafeteria, gaming rooms, etc. CREs can also provide services like shuttle car services and shared vehicle services.
Understand the Needs of Co-Working Users
To compete in the co-working space, it’s important to understand the needs of co-working users. Co-working users are looking for flexible workspace solutions that can adapt to their needs. They want a space that is functional, comfortable and promotes collaboration.
CRE owners need to design their co-working spaces with these needs in mind. This may mean creating flexible floor plans that can be easily reconfigured, providing comfortable seating options, and offering amenities like meeting rooms and kitchen facilities.
Users must be able to book a meeting room of their choice when they need one and even book the desk where they want to work. This can be done with a room and desk booking system.
Events & Community Creation
One of the biggest draws of co-working spaces is the sense of community they offer. Co-working users enjoy being part of a community of like-minded individuals who can collaborate and support each other.
CRE owners can build a community by hosting events, providing networking opportunities and creating shared spaces that encourage collaboration. This can help differentiate their co-working space from others in the area.
This bonding and the intangible benefits of community and shared experiences can play a critical factor in discouraging tenants from moving into another space.
In the age of rapid disruption, CREs face significant challenges from new entrants in the co-working space. Being able to respond to these changes by differentiating their space through technology and services can mean increased tenant retention, increased satisfaction, and more to the bottom line.
While we still think that co-working space growth is in its infancy, the lower barriers to entry by many players mean that differentiation and rapid response to user needs is the key to survival.